74 Percent of APAC Banks Expect Frauds to Go up in 2019
A recent poll by FICO states that three in every four APAC banks believes that the fraud will increase moderately or significantly in 2019. The two key concerns faced by banks in 2019 will be card not present fraud (CNP Fraud) and card taken out by criminals under false identities (application fraud).
Dan McConaghy, President, FICO, comments, “The volume and velocity of transactions is growing in Asia. Over 50 percent of global online retail sales in 2018 originated from the region. This growth in e-Commerce along with the efforts of banks to digitize more services has seen a change in fraud risk. Dealing with an ocean of transactions means that AI and machine learning are essential when it comes to detecting fraud”.
Almost 50 percent of the APAC banks continue to simply block cards with the first fraud alert, whereas six percent will still keep the card open while trying to confirm fraud with the customer. The survey also points out the efforts to keep up with changing fraud patterns remain mixed. Remarkably, only six percent banks in the APAC region valued customer satisfaction as their number one metric and only four per cent said customer attrition was their key measurement. FICO survey was conducted on 50 executives from financial institutions across the APAC region at the annual FICO Asia Pacific Fraud Forum held in Bali, Indonesia. Out of the banks surveyed, 54 percent believes that a moderate rise in fraud is expected while 20 percent believes that a significant jump is expected. Four in ten banks says that identity theft is a key priority for four-in-ten banks. Also, APAC accounts for 35.9 percent of global cyber-security events and almost 27.2 percent of compromised records worldwide.
“In developed markets where their lenders compete over share of wallet, we start to see a greater emphasis on customer experience. Potentially, what we are seeing is that in some organizations the fraud department remains a more siloed operation. However, as fraud levels climb, increased levels of customer churn are likely to shift the priorities for banks.” adds, McConaghy.
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