80% of Financial Firms Employ AI in Fraud Detection, Says Feedzai Reportby Fintech News Singapore November 15, 2023
Financial firms in the Asia Pacific region are taking steps to combat fraud, with 97% of organisations surveyed having some form of awareness programme in place.
These finding are from a joint report by Feedzai, a financial fraud detection software provider, and Chartis Research where financial crime professionals from 48 banks and 27 payment service providers (PSPs) in Australia, Malaysia, the Philippines, Thailand and Singapore were surveyed.
Among the improved steps taken by financial firms include better internal touchpoints for scams and increased use of technology, with more than 80% of organisations now using artificial intelligence (AI) in some form to detect fraud.
However, the report also found that scams present a growing challenge and concern in the region, as they become more sophisticated. Increased operational costs were considered the largest impact of fraud and scams, with those in Australia most likely to cite it as the biggest impact (67% of respondents) while those in Singapore were least likely (38%).
Despite this, most organisations don’t feel their firm could adapt to changing scam typologies fast enough, with only 6% fully confident in their ability to adapt. PSPs are more likely to have comprehensive scam controls than banks, with 60% of PSPs planning to improve fraud detection controls, compared with 39% of banks.
The study also found that almost 90% of respondents believe that scam reimbursement regulations will be introduced in the next 12 months.
Tom Clifford, Strategic Accounts Director at Feedzai said,
“While many organisations have comprehensive controls in place, the capability to leverage enterprise data and adapt to the changing fraud landscape remains a significant concern.
With potential scam reimbursement regulations just around the corner, banks and payment service providers will need to become more proactive in real-time fraud mitigation.”
Nick Vitchev, Research Director at Chartis said,
“Working with Feedzai, Chartis carried out a study to understand the relative priorities, challenges, and solutions across some of the more dynamic markets. The good news is that all of the markets we surveyed are committed to preventing scams via a variety of methods.
The other good news is that Asia Pacific already contains institutions and governments that are leading the global fight against scams, and those that may be on the same trajectory can learn from those trailblazers.”