An average of $160,000 in successful monthly fraudulent transactions was recorded by retail, e-commerce, and financial service businesses in Asia Pacific from June to August, according to the 2019 LexisNexis Risk Solutions True Cost of Fraud APAC study.
In a survey of 360 businesses across Singapore, Indonesia, Malaysia, and the Philippines, the study found that there was an average of almost 400 successful monthly fraudulent transactions in the region, with each fraudulent transaction costing businesses nearly three and a half times the amount of the lost transaction value.
Costs incurred by businesses for fraudulent transactions include, but are not limited to, the lost transaction value for which firms are held liable, costs for replacing or redistributing lost or stolen merchandise, fees and interest paid to financial institutions, labor costs for investigation, and external costs for expense recovery.
“Fraud is a significant issue for APAC businesses, especially for the financial services industry and for businesses that engage in mobile commerce,” said Alisdair Faulkner, chief identity officer, Business Services, LexisNexis Risk Solutions.
The study found that the average overall costs of fraud is 1.75% of revenues. By country, fraud cost is highest as a percentage of revenue for Philippine businesses (2.03%), followed by Malaysia (1.93%), Indonesia (1.66%), and Singapore (1.57%).
Fraud costs are biggest as a percentage of revenues for e-commerce businesses (2.50%), followed by retail businesses (1.64%) and financial services firms (1.56%).
Mobile web browsers have historically been considered less secure, and fraudsters are now increasingly targeting mobile apps at a global level through click flooding and botnet attacks. Managing risk in mobile commerce, however, remains secondary to providing a streamlined user experience.
Few businesses in the region track fraudulent transactions by both channel and payment method in an effort to understand weak points within their anti-fraud strategy.
Verifying customer identities emerged as the top challenge in all countries for businesses serving customers through online and mobile channels.
