A recent study conducted by LexisNexis® Risk Solutions highlights the alarming increase in fraud experienced by businesses in the Asia Pacific (APAC) region. The study, titled the 2023 LexisNexis® True Cost of Fraud™ Study – Asia Pacific, reveals that the cost of fraud in APAC is now nearly four times the face value lost in fraudulent transactions.
One striking finding from the study is that 66% of Australian organizations reported a rise in fraud over the past year. This surge in fraudulent activities has significant financial implications, with businesses incurring an average cost of AUD$3.68 for every Australian dollar lost to fraud. These costs include not only the direct financial losses but also internal labor expenses, external costs, legal fees, and recovery fees. Furthermore, businesses have to bear the additional burden of replacing or redistributing lost or stolen merchandise.
Interestingly, the study highlights that digital channels now account for a majority (51%) of fraud losses in APAC, surpassing physical fraud for the first time. This shift can be attributed to the rapid adoption of digital payments, which has opened the doors for more innovative forms of fraud. Cybercriminals are taking advantage of the anonymity offered by digital, cross-border transactions to execute fast and untraceable fraudulent activities. The rise of scams and the use of technologies like artificial intelligence (AI) further exacerbate the exploitation of both consumers and businesses.
The study also sheds light on the evolving tactics of criminals. In APAC, the stage of the customer journey with the highest fraud losses is new account creation, posing a significant challenge for both financial institutions and retailers. Criminals are leveraging the growing popularity of digital banking and digital commerce to open fraudulent accounts using stolen or synthetic identities.
To combat the rising threat of fraud and cybersecurity risks, organizations are urged to embrace forward-thinking fraud management and authentication solutions. This includes leveraging cutting-edge technologies like AI, machine learning, and biometric and behavior-based authentication methods.
The True Cost of Fraud Study – Asia Pacific surveyed 382 fraud management decision-makers at financial institutions and retail companies in APAC, including 75 in Australia. The study provides valuable insights into the current state of fraud and the challenges associated with digital payments in emerging markets.
As fraud continues to rise, businesses must remain vigilant and adopt robust strategies and technologies to protect themselves and their customers from the ever-evolving tactics of fraudsters.
Fraud on the Rise: Businesses in APAC Grapple with Increasing Losses
The article highlights the alarming increase in fraud experienced by businesses in the Asia Pacific (APAC) region, based on the 2023 LexisNexis True Cost of Fraud Study – Asia Pacific. The study reveals that the cost of fraud in APAC is now nearly four times the face value lost in fraudulent transactions. This indicates a growing challenge for businesses in the region.
One key trend discussed in the article is the significant rise in fraud reported by Australian organizations, with 66% of them experiencing an increase in fraudulent activities over the past year. This surge in fraud has substantial financial implications, with businesses incurring an average cost of AUD$3.68 for every Australian dollar lost to fraud. These costs include various factors such as direct financial losses, internal labor expenses, external costs, legal fees, and recovery fees. Additionally, businesses have to deal with replacing or redistributing lost or stolen merchandise, adding further burdens.
Another significant trend highlighted in the study is the shift in fraud losses from physical to digital channels. Digital channels now account for a majority (51%) of fraud losses in APAC, surpassing physical fraud for the first time. This shift can be attributed to the rapid adoption of digital payments, which opens the doors for more innovative forms of fraud. Cybercriminals are exploiting digital, cross-border transactions to execute fast and untraceable fraudulent activities. The rise of scams and the utilization of technologies like artificial intelligence (AI) further exacerbate the exploitation of both consumers and businesses.
The article also discusses the evolving tactics of criminals in APAC. One notable finding is that new account creation is the stage of the customer journey with the highest fraud losses. This poses a significant challenge for financial institutions and retailers. Criminals are taking advantage of the growing popularity of digital banking and digital commerce to open fraudulent accounts using stolen or synthetic identities.
To address the rising threat of fraud and cybersecurity risks, organizations are advised to adopt forward-thinking fraud management and authentication solutions. These include leveraging cutting-edge technologies such as AI, machine learning, and biometric and behavior-based authentication methods. By embracing these technologies, businesses can enhance their ability to detect and prevent fraudulent activities effectively.
Despite these measures, businesses in APAC still face significant challenges and controversies associated with fraud. One key challenge is the ever-evolving tactics of fraudsters, which necessitate constant adaptation and updated security measures. Additionally, businesses need to find a balance between implementing robust security measures and maintaining a seamless customer experience, as stringent security measures may impact user convenience and trust.
As fraud continues to rise in the APAC region, businesses must remain vigilant and proactive in implementing robust strategies and technologies to protect themselves and their customers. By staying ahead of emerging threats and leveraging advanced fraud management solutions, businesses can mitigate the financial and reputational risks associated with fraud.
Related Links:
– LexisNexis® Risk Solutions (Main domain)