A recent LexisNexis Risk Solutions study has found that key pain points in fraud trends in the Asia-Pacific (APAC) region during the pandemic are in navigating new payment mechanisms, transacting through online and mobile channels.
A combination of factors is driving the high cost of fraud, including market events influencing the use of transaction channels/payment methods, the challenges that businesses face when assessing fraud with these transactions and the less than optimal approach that businesses take towards fraud detection, prevention and minimising customer friction.
According to Cameron Church, director of fraud and identity, LexisNexis Risk Solutions, a successful fraud detection and prevention approach involves an integration of technology, cyber security and digital experience programs to address unique risks from different transaction channels and payment methods.
“As fraudsters become more sophisticated and their methods more complex, businesses need a robust fraud and security technology platform that helps them adapt to a changing environment, offering strong fraud management while maintaining a low-friction customer experience,” Church said.
“A successful fraud detection and prevention approach involves an integration of technology, cyber security and digital experience programs to address unique risks from different transaction channels and payment methods.
“High fraud costs impact ecommerce merchants, retailers and financial institutions as they increase each year – even without the influence of COVID-19.”
The 2021 True Cost of Fraud APAC study covered the retail, ecommerce, financial services and lending sectors for Australia, Hong Kong, India and Japan. The report’s findings stem from a survey of 418 risk and fraud executives in retail, e-commerce, financial services and lending companies in the APAC region in 2021.
Data from the LexisNexis Fraud Multiplier, the total amount of loss a firm incurs based on the actual US dollar value of a fraudulent transaction – shows the cost per transaction is $3.51 in Australia; $3.61 in Hong Kong, $3.87 in Japan and $3.84 in India.
All four countries reported higher costs per transaction than the regional 2019 average that involved other APAC markets at $3.40.
“With sophisticated threats on the rise, taking a multi-layered solution approach has proven to be the most effective way to fight fraud across various channels and transaction types, as well as performing a more complete assessment that combines physical and digital identity data analysis,” Church added.
“Using different solutions to support fraud detection at various points throughout the customer journey will strengthen a firm’s overall defence.”
Nastasha is a Journalist at Momentum Media, she reports extensively across veterans issues, cyber security and geopolitics in the Indo-Pacific. Previously, she was a Content Producer at Verizon Media, a Digital Producer for Yahoo! 7 and Channel 7, a Digital Journalist at Sky News Australia, as well as a Website Manager and Digital Producer at SBS Australia. She started her career in media as a Video Producer and Digital News Presenter at News Corp Australia.