Businesses across Australia, India, Japan and Singapore are deprioritising security and fraud prevention, as nearly one-third favour an emphasis on revenue generation, according to Experian’s 5th Global Identity and Fraud Report.
Experian believes such an approach could increase the risk of an already vulnerable digital ecosystem for consumers across the region.
The latest report surveyed more than 9,000 consumers and 2,700 businesses during three waves throughout the pandemic across 10 countries spanning North America, Latin America, Europe and Asia-Pacific.
This includes the 3,000 consumers and 900 business executives across four APAC countries – Australia, India, Japan and Singapore.
Across the four APAC markets, businesses are increasingly shifting to digital to meet consumers online, with four in every five respondents saying they currently have a digital online identity strategy in place for recognising customers across digital platforms.
Meanwhile, 73% are confident they have the right metrics and KPIs in place to effectively manage fraud. As businesses focus on digitisation, the risk of fraud grows significantly as fraudsters can increase their scale of attack through faceless, automated schemes.
Despite growing fraud risk due to digitisation, there was a 16-percentage-point decline in business intention to increase fraud management budgets from June 2020 to January 2021, with half (53%) expecting to do so in the next six months.
Overall, the APAC region reported the most significant change compared to the other regions globally, with India (59%) and Australia (57%) most likely to increase fraud management budgets, followed by Singapore (52%) and Japan (46%).
These results indicate that businesses may not realise the same data and tools used to improve security and fraud detection also enhance the customer experience, if implemented properly.
Because of the pandemic, nearly half (46%) of consumers from the countries surveyed anticipate increasing their spending on items purchased online in the next three to six months.
With fraud rates continuing to rise, consumers are prioritising a safe and secure online environment — 56% indicate that security is the most important dimension when it comes to an online experience. Additionally, three out of five consumers expect that businesses should provide increased levels of security and data protection when going online.
“The rise in digitisation means greater risk for businesses and without a focus on fraud prevention, they will be prone to losses in the long-term,” said Ben Elliott, Experian CEO in APAC. “While creating a great online consumer experience is important, enterprises who put all their money into the digital experience at the expense of fraud prevention will be targeted by fraudsters, who have sophisticated ways of identifying weaker online platforms and targeting them.”