online Is Malaysia doing enough to tackle the growing threat of cyberattacks? The answer is no

Is Malaysia doing enough to tackle the growing threat of cyberattacks? The answer is no(Source – Shutterstock)

One in four consumers are online fraud victims in the Asia Pacific

Online fraud continues to be a big problem globally. In Asia Pacific (APAC), the number of online fraud cases continues to increase as well. Be it through banking scams or payment scams on e-commerce, consumers continue to experience huge financial losses from online fraud.

Many businesses continue to invest in technologies that help deter fraud. This includes leveraging AI and other fraud detection solutions to deal with frauds and protect consumers. For businesses, increasing victims of fraud that are linked to their organization not only damages the company’s reputation but can also result in drops in sales or the use of the service.

For example, when a major bank recently discovered its customers have been victimized by scams through online fraudulent payments, it was quick to solve the problem. However, the bank also suffered losses as many customers questioned the bank’s capabilities in dealing with such cases.

Interestingly, a survey by Experian has found that while a quarter of consumers across APAC have been victims of online fraud, many remain unconcerned about fraud and identity theft amidst today’s growing fraud risk due to digitization.

Experian’s Global Identity & Fraud Report highlighted that consumers in China and India appeared to be especially vulnerable, with 29% of consumers in each market has been the victim of online fraud. This is slightly higher than global figures, where nearly 1 in 4 consumers have also experienced similar incidents. At the same time, while 45% of Indian consumers are very concerned about fraud and identity theft, only 9% of Chinese consumers feel the same way. Meanwhile, 26% of Singaporean consumers are very concerned about fraud incidents.

Increasing fraud will only lead to a significant impact on both monetary and reputational damage for fraud victims. As such, 5% of APAC consumers shared that at least one of the fraud incidents they encountered has resulted in substantial monetary or reputational damage. Meanwhile, 8% of respondents’ friends and family also suffered substantial monetary losses due to fraud incidents.

 So how does online fraud target customers?

Thanks to an increased usage of digital services, from banking to e-commerce, consumers are becoming increasingly vulnerable to fraud on social media sites and apps. Consumers surveyed in APAC experience the most fraud incidents across these platforms. This is exceptionally high in Indonesia, where more than half (51%) have experienced fraud incidents on social media sites.

Four in five APAC consumers (80%) expect businesses to take the necessary steps to protect them online, reflecting global trends where nearly three-quarters of consumers expect businesses to do so. While consumers are starting to view online security as a legitimate trade-off for businesses collecting their personal data, they expect businesses to protect them from online threats that are too complex for consumers to handle.

Businesses globally are acknowledging the growing risk of fraud with nearly half of all business respondents reporting that fraud was a high concern, and more than half of survey respondents from retail banking, credit card networks, and consumer lending specialists categorizing their fraud concerns as high.

While businesses are taking action to protect against fraud, there remains a gap between consumer expectations and the digital experience businesses can offer. Only 26% of Singaporean consumers who were interviewed feel that businesses have met their expectations when it comes to a digital experience, and 59% still do not feel secure when transacting with a business online.

The reality is though, there is only so much businesses can do. At the end of the day, consumers need to be vigilant online to avoid fraud. This includes checking the legitimacy of a payment site or portal as well as avoiding clicking on suspicious content and links online.

As such, a seamless digital experience continues to be a priority for APAC consumers, who trust businesses more if they can recognize them on a repeated basis without additional layers of verification. For 94% of Malaysian consumers surveyed, they are extremely to somewhat trusting of businesses that can provide a seamless customer journey by recognizing their online identity repeatedly.

The report also showed an increased dependency on advanced technology such as AI. 67% of APAC consumers has interacted with AI-powered chatbots or virtual assistants in the past six months. Overall, APAC consumers are becoming more comfortable with businesses leveraging AI, with 64% of Indian respondents much more and somewhat likely to trust AI more than humans.

Luciano Scalise, Decision Analytics Managing Director EMEA & APAC, Experian believes that maintaining a safe and secure online experience is a shared responsibility between consumers and businesses. Consumers need to be aware of the risks they face online and practice good cyber hygiene.

“Businesses can leverage orchestration solutions to connect recognition, fraud prevention, and their customer experience, and take advantage of a single platform to bring all their tools and data sources together. This allows them to adapt to changing risks and improve their customer journey. It’s all about striking a fine balance in keeping their customers protected whilst ensuring a seamless digital experience,” commented Scalise.