By Francis Allan L. Angelo
A new research from GBG, a leader in global identity verification and fraud prevention, highlights a surge in sophisticated and organized fraud across businesses in the Asia-Pacific (APAC) region.
The “Global Fraud Report 2024” sheds light on the increasing concerns of fraud prevention professionals, emphasizing the urgent need for enhanced collaboration across industries to combat this growing threat.
It was culled from surveys on businesses in Australia, New Zealand, Malaysia, Indonesia, Thailand and the Philippines in banking, eCommerce, financial services, FinTech, gaming, insurance, lending and telecommunications to gauge levels and types of fraud, how this is impacting businesses and how they are responding.
Rising Fraud Concerns in APAC
The report, based on a comprehensive survey of over 500 fraud prevention professionals in APAC, indicates that nearly all respondents (97%) are deeply worried about the escalating sophistication and prevalence of fraud.
The concern is justified, as 70% of those surveyed reported a noticeable uptick in fraud attempts over the past year—a significant increase compared to other regions like Europe, the Middle East, and Africa (55%) and the United States (48%).
In terms of the financial risks, 11% shared that the average transactional value of attempted fraud attacks at their organisation is between US$35,000 to US$50,000.
“The surge in fraud attempts is a clear indicator of how organized and advanced these criminal networks have become,” said Carol Chris, General Manager of GBG APAC.
“Technological advancements, particularly in Generative AI (GenAI), have provided fraudsters with tools to create more convincing synthetic identities, making it increasingly challenging for businesses to safeguard their operations.”
The Role of Generative AI in Fraud
Generative AI has emerged as a significant threat in the fraud landscape, with 35% of APAC professionals identifying it as a critical factor in the evolution of identity verification and financial fraud over the next three to five years.
The report highlights that GenAI is not only facilitating the creation of more realistic synthetic identities but is also enhancing the accuracy of fake ID documents and boosting the effectiveness of phishing and smishing attacks.
According to the report, 27% of the respondents perceived GenAI as a tool to create more convincing synthetic identities, with 26% believing that GenAI will increase the accuracy of fake ID documents and possess a strong influence on phishing and smishing.
Gaps in Fraud Prevention and Collaboration
Despite the pressing need for advanced fraud prevention measures, the report reveals a concerning gap in the readiness of APAC businesses.
Nearly 19% of fraud prevention professionals admitted that their organizations lack the appropriate technologies to fend off sophisticated fraud attempts.
Additionally, 28% of respondents identified understanding the latest fraud trends as a significant challenge, while 27% pointed to difficulties in identifying and stopping fraud at the customer onboarding stage.
The report also emphasizes the critical role of cross-sector collaboration in effectively combating fraud.
Most fraud prevention professionals acknowledge cross-sector identity intelligence sharing and collaboration can be a strategic differentiator in beating fraud, with New Zealand (97%) and the Philippines (88%) leading the way.
In fact, 81% of respondents are currently part of an identity intelligence consortium, which connect transactions taking place around the world and share international consumer intelligence between businesses, across sectors and national borders.
While a majority of fraud prevention professionals recognize the importance of identity intelligence sharing, less than half are actively engaged in collaborative efforts.
Only 47% participate in industry forums and knowledge exchanges, and just 46% invest in technologies that facilitate secure data exchange. Moreover, 46% partner with law enforcement agencies for information sharing.
Today, 83% of respondents surveyed believe organisations are too worried about maintaining a competitive advantage to participate in collaboration to combat fraud. On top of this, almost 4 in 5 (79%) believe global governments are not doing enough to support cross-sector collaboration.
The Human Cost of Fighting Fraud
The report also highlights the heavy toll that the fight against fraud is taking on professionals in the field.
Every respondent reported experiencing stress and anxiety related to the risks that fraud poses to their organizations. Verification of identity (46%) and insufficient resources (44%) were identified as the top challenges keeping them up at night.
This constant pressure has led to significant mental health issues, with nearly 70% of fraud prevention professionals having fallen victim to fraud themselves.
The burnout experienced by these professionals not only affects their well-being but also has broader implications for the effectiveness of fraud prevention strategies across the region.
A Call for Unified Action
The findings of the Global Fraud Report 2024 serve as a wake-up call for businesses across APAC. As fraud becomes increasingly organized and sophisticated, the need for cross-sector collaboration has never been more critical.
Yet, the report reveals a troubling reality: while the desire for collaboration is strong, actual efforts remain limited.
“It is imperative that collaboration across industries comes to the fore to combat fraud, but we must first address the existing pain points. We urge businesses to move past competition and work together to out manoeuvre fraudsters. This will not only protect organisations but also offer critical support to the fraud prevention professionals on the frontline,” Carol Chris said.
The report concludes with a call to action for both businesses and governments. With 83% of respondents believing that organizations are too focused on maintaining a competitive edge to collaborate effectively, and nearly 79% feeling that global governments are not doing enough to support cross-sector efforts, the message is clear: A unified, collaborative approach is essential to staying ahead of increasingly sophisticated fraudsters.
For more findings, and to download the full Global Fraud Report, please visit: https://hubs.ly/Q02HVSYq0
