True Cost of Fraud APAC Study

KEY FINDINGS

1. The cost of fraud for surveyed industries in APAC has risen sharply. On average, a fraudulent transaction costs nearly four times the lost transaction value on average now, compared to between 3.46 to 3.57 times from 3 years ago. While retail and ecommerce industries are being hit with fraud, financial institutions are getting hit harder in terms of targeted scams, attack volume and costs.
2. Consumer and merchant behaviors have changed with the acceleration of the digital transformation, including increased adoption of remote channel use, digital payment methods and omnichannel focus. While digital channels have expanded, in-person transactions are still very prevalent. For example, Buy Online/Pick Up in Store (BOPIS) is on the rise and some ecommerce merchants have expanded to an omnichannel strategy (clicks-to-bricks) involving physical stores or partnership with retailers.
3. The digital transformation is presenting opportunities for fraudsters, contributing to the increased in fraud costs. Fraud losses continue to grow as the adoption of mobile apps and digital wallets, along with other contactless payment methods, has accelerated in recent years. Buy Now, Pay Later (BNPL) services account for over one-tenth of payment method losses, which is disproportionately higher than the average volume of transactions through these apps. While merchants and financial institutions focus on fraud at the point of sale/distribution of funds, they need to also focus on the account login and other use cases in the customer journey.
4. Identity verification is a common top challenge across the customer journey, particularly at the new account creation and login stages. But it is also important to assess the payment risk as well. Fraud can occur along the entire customer journey, such as user authentication, new account creation, logins and payments.
5. Merchants and financial services firms can reduce fraud costs and risks through the implementation of a holistic approach by bringing together vital elements in cybersecurity, digital customer experience and fraud operations through a multi-layered solution approach.