Rising digital fraud prompts tech investments in Asia’s banks

By Francis Allan L. Angelo

A recent study by GBG, in collaboration with Chartis Research, has revealed that 8 in 10 Asian financial institutions face significant challenges in detecting digital fraud.

As highlighted in their report, “Building Trust in Digital Channels: A Study of Banking and Finance in Asia,” the growing complexity and frequency of fraud incidents have prompted a push for advanced technological solutions.

The study surveyed 114 senior fraud professionals across Asia, uncovering that nearly 90% of respondents view evolving fraud tactics and sophistication as their biggest challenge.

Particularly concerning are the increases in scams and phishing attacks, reported by 59% and 57% of respondents respectively.

Synthetic ID-based fraud, traditionally more common in North America, is now also on the rise in Asia, with 58% noting an increase in such cases.

GBG’s General Manager for Asia and Fraud APAC, Bernardi Susastyo, emphasized the urgency of addressing these threats.

“Our collaboration with Chartis sheds light on the pressing challenges faced by the banking and finance sector in Asia, emphasizing the imperative for seamless customer onboarding and robust fraud prevention measures,” Susastyo said.

“As the ever-evolving fraud threats loom large, it is encouraging to see more of these institutions adopt a proactive security posture through emerging technologies.”

The report also found that 97% of respondents acknowledge the difficulty in balancing security with customer experience, with 79% seeing this as a significant hurdle.

The rapid push for digital adoption in Asia, where real-time payments are now common, naturally increases vulnerabilities to fraud, necessitating robust security measures to maintain customer trust.

Despite the challenges posed by legacy systems and poor data quality, 88% of the organizations surveyed are already leveraging consolidated platforms to mitigate risks.

The shift towards machine learning and artificial intelligence is evident, with investments in these technologies expected to rise from 16% in 2023-24 to 68% in 2025-26.

This move away from traditional anomaly detection towards automated capabilities aims to reduce the burden on staff and improve fraud detection efficiency.

GBG’s report underscores the need for a multi-layered approach to fraud detection, integrating traditional techniques with advanced methods like neural networks. The strategy is crucial for accurately detecting newer, more complex fraud typologies and reducing high false positive rates caused by legacy systems.

For more findings, and to download the full study, please visit: https://hubs.ly/Q02HmC3b0