Feedzai, the world’s first RiskOps platform for financial risk management, and Chartis Research, leaders in risk technology research and insights, have released a joint report exploring how financial firms are responding to fraud in the APAC region.
Leading the charge in the global fight against fraud, Feedzai and Chartis’ joint report, Scam Prevention “in Asia-Pacific: A Survey of Banking and Payment Provider Professionals will be launched at Singapore FinTech Festival and also coincides with International Fraud Awareness Week.”
The report surveyed financial crime professionals “from 48 banks and 27 payment service providers (PSPs) in Australia, Malaysia, the Philippines, Thailand and Singapore and found that advancements have been made to the approach to scams, with more than 9 in 10 organizations (97%) surveyed having some form of awareness program in place.”
Other improvements include better internal touchpoints “for scams, with two-thirds of firms surveyed having a regular touchpoint, such as regular briefings or training on identifying fraud as well as an improvement in the use of technology.”
More than 80% of organizations now “use artificial intelligence (AI) in some form to detect fraud. AI-based fraud assessments involve the use of machine learning (ML) algorithms to analyze historical fraud data and identify patterns and anomalies that may indicate fraudulent activity.”
However, the report also found “that as fraud and scams become more sophisticated, scams present a growing challenge and concern in the region. Increased operational costs were considered the largest impact of fraud and scams.”
Those in Australia were most likely “to cite increased operational costs as the biggest impact of fraud detection (67% of respondents), while those in Singapore were least likely (38%).”
Although 46% of respondents felt they “had comprehensive scam controls in place, most didn’t feel their firm could adapt to changing typologies fast enough, with only 6% fully confident in their ability to adapt. PSPs are more likely to have comprehensive controls than banks, with 60% of PSPs planning to improve fraud detection controls, compared with 39% of banks.”
With almost 90% of respondents believing “that scam reimbursement regulations will be introduced in the next 12 months, banks and PSPs have to prepare. Almost 30% of respondents cited reimbursement as the largest impact of scams. This concern is likely to become more pertinent given expectations around future regulation.”
Tom Clifford, Strategic Accounts Director at Feedzai said:
“Banks and payment service providers have clearly made progress with fraud prevention, but it still remains a challenge. As fraud and scams continue to evolve and become more sophisticated, the industry needs to continuously adapt to the changing landscape.”
Nick Vitchev, Research Director at Chartis said:
“Scams pose a grave threat to consumers, institutions, and governments across Asia Pacific. Working with Feedzai, Chartis carried out a study to understand the relative priorities, challenges, and solutions across some of the more dynamic markets.”