One survey in APAC has had respondents in two industries pointing to losses that were much more than what was defrauded
Based on an August 2023 survey of 382 global fraud management decision-makers at financial institutions and retail firms in the Asia Pacific region to understand the state of fraud and the challenges associated with digital payments in emerging markets, LexisNexis Risk Solutions has published the following findings.
First, 58% of respondents reported an increase in fraud in the 12 months prior to the survey. In terms of the cost, every dollar (in Asian currency) lost to fraud was cited to have cost $3.07 for respondents from the retail industry, and $4.59 for respondents from financial institutions. These costs included financial losses due to fraud, as well as internal labor expenses, external costs, legal costs and recovery fees, along with the expenses associated with replacing or redistributing lost or stolen merchandise.
Second, digital channels accounted for 51% of overall fraud losses in APAC, surpassing physical fraud for the first time in the annual survey. Also, the stage of the customer journey with the highest fraud losses among respondents’ was new account creation, presenting the greatest challenge for respondents in the financial institutions (46%) and retailing (44%).
Other findings
Third, in terms of commercial impact: 73% of respondents indicated that fraud had influenced customer satisfaction, and 75% cited noticing its impact on customer conversion.
Fourth, respondentsfrom financial institutions were realizing increasing trends in identity theft, scams and digital wallet fraud, while new payment methods were seen to have provided fraudsters with opportunities to exploit vulnerabilities in the retail sector.
According to the firm’s APAC director of fraud and identity, Thanh Tai Vo, new forms of fraud increase the risk of financial losses for consumers and businesses, and the “fraud multiplier effect” can cause fraud losses to far exceed the lost face value in any transaction. “Preventing fraud requires a multi-layered approach throughout the customer journey,” Thanh commented.
