Businesses in the Asia-Pacific (APAC) region are deprioritising security and fraud prevention with nearly one third favouring revenue generation, according to an Experian global study.
This makes the digital ecosystem even more vulnerable for consumers.
Experian’s 5th Global Identity and Fraud Report covered more than 9,000 consumers and 2,700 businesses across 10 markets globally, including Australia, India, Japan, and Singapore.
Across the four APAC markets, businesses are increasingly shifting to digital to meet consumers online. Eight in 10 currently have a digital online identity strategy in place for recognising customers across digital platforms, while 73 percent 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, there was a 16-percentage point decline in business intention to increase fraud management budgets from June 2020 to January 2021. Only slightly more than half (53 percent) expect to do so in the next six months.
India (59 percent) and Australia (57 percent) most likely to increase fraud management budgets, followed by Singapore (52 percent) and Japan (46 percent). These results indicate that businesses may not realise the same data and tools utilised to improve security and fraud detection also enhance the customer experience, if implemented properly.
With fraud rates continuing to rise, APAC consumers are prioritising a safe and secure online environment with 56 percent indicating that security is the most important dimension when it comes to an online experience. Three in five APAC consumers expect businesses to provide increased levels of security and data protection when going online.
“It’s understandable that businesses are focusing on revenue generation, digitisation, and creating a better digital customer experience, especially in the context of a pandemic. However, 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, CEO Asia Pacific of Experian.
“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. Businesses need to strike a balance between ensuring a top-notch digital experience and keeping their fraud prevention programme up to speed,” he added.
When businesses invest in fraud protection, they are protecting themselves and their customers. Beyond financial losses, businesses risk losing customer trust, which would be difficult to regain.