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Addressing fraud in Asia

Paul Henaghan, Managing Director, APAC at ACI Worldwide | Dec. 3, 2014
While new ways of interacting with banks may improve customer satisfaction, they introduce new opportunities for criminals too. So what should financial institutions do to avoid falling prey to fraud?

Although EMV is a proven standard to help control fraud, and customer education is also helping, many banks are still working to proactively combat fraud. For instance, even though payment card risk systems are commonly adopted in most financial institutions, banks are increasingly looking for more sophisticated fraud detection and monitoring systems. This is especially important in markets like China, where credit cards are still relatively new and not heavily used. It can therefore be difficult to rely on existing information or customer habits to identify potential fraud.

If customer data has already been compromised and the fraudster has already found a way to start the transaction, systems that detect potential fraudulent patterns in spending or usage are often the last line of defence. If we take the Hong Kong example above, the scam could have been prevented, at least partially, by banks leveraging fraud prevention solutions. These solutions include those that remember users' normal behaviors and send alerts once a transaction stands out from the normal pattern.

In addition, if a financial institution works together with a third-party system provider or expert, they can take advantage of up-to-date industry practices and rules, which can often be more robust than a bank's internal fraud processes and rules detection rules. Working with a third party also helps financial institutions focus on their core business and yet still stay ahead in the never-ending fight against fraud.

Mobile and online payments and banking are here to stay. As Asian customers increasingly demand anytime and anywhere access to their accounts, banks face opportunities and challenges. On one hand, banks have an entirely new set of channels to interact with customers to provide more robust financial products and solutions. On the other, the channels are completely new ways for fraudsters and criminals to attempt fraudulent activities. While Asian markets vary significantly and each country is unique in terms of the fraud problems and challenges, the solutions are the same: customer education is key, and so are the systems to accurately detect and prevent fraudulent transactions themselves.


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