The Association of Southeast Asian Nations (ASEAN) banking industry has seen a surge in fraud and illicit activities in recent years. As the digital landscape continues to evolve, fraudsters are becoming increasingly sophisticated in their methods, posing a serious threat to both financial institutions and their customers.
Recent phishing and fraud incidents involving several banks in Singapore have highlighted the seriousness of the problem and the urgent need for banks to step up their security measures.
Rising fraud in Singapore banks a cause for concern in ASEAN
Over 200 DBS Bank clients I was a victim of an SMS phishing scam In the first two weeks of 2024, losses totaled S$446,000 (approximately US$328,947).
The bank’s customers also fell victim to a phishing scam via WhatsApp Web involving more than 90 people in 2023, resulting in a total loss of S$176,000 (approximately US$129,841).
DBS isn’t the only bank to make the news for phishing scams: between December 2021 and January 2022, nearly 800 people fell victim to an SMS phishing scam in which fraudsters impersonated OCBC. Losses exceeded S$13 million (US$9.59 million), ultimately leading the bank to take unprecedented action. Compensate the entire amount as a “goodwill reward”.
Such incidents highlight the evolving threats of fraud and abuse affecting the ASEAN banking industry, and the situation continues to become more precarious with the emergence of new technological innovations such as: Artificial Intelligence (AI) Fraud.
Singapore Police data It shows that the number of fraud and cybercrime cases increased by almost half (49.6%) to 50,376 in 2023 compared to 33,669 the previous year.
Factors behind the rise in bank fraud and fraud in ASEAN
The rise in fraud and illicit activities in ASEAN banks is not an isolated incident but can be attributed to several factors. First, the rapid adoption of digital banking services over the past few years, accelerated by the COVID-19 pandemic, has created new opportunities for cybercriminals to exploit vulnerabilities in online platforms.
Second, some customers, especially older adults and those new to online banking, lack digital literacy, making them more susceptible to phishing attacks and social engineering tactics.
Finally, many scams are committed across international borders, making it difficult for law enforcement to track and apprehend the perpetrators.
Strengthening defenses: Banking strategies to combat fraud and abuse
To combat this growing threat, ASEAN banks are implementing a range of measures to strengthen their defenses against fraud and fraudulent activities.
“Many financial institutions are already adopting biometric authentication and liveness detection technologies to strengthen their fraud prevention systems,” said Frederick Ho, vice president, APAC. Jumio.
of Jumio 2024 Online Identity Survey The survey revealed that 85% of Singapore consumers are willing to spend more time on identity verification procedures when accessing their financial services accounts for added security.
Frederick Ho, Vice President of Asia Pacific at Jumio
“However, with the rise of advanced deepfake and face-swapping technology, relying on biometric authentication alone is no longer enough. Bad actors can now use these tools to create highly convincing videos, images or audio recordings.
A notable example is the recent $25 million fraud case in Hong Kong, where fraudsters used deepfake technology to impersonate business executives in video calls. This highlights the need for more robust, multi-layered identity verification solutions that can effectively mitigate the risks of evolving fraud techniques.”
Frederick said.
In high-risk industries such as financial services, advanced biometric authentication and AI-powered fraud analytics can detect subtle patterns and anomalies across corporate networks that could indicate fraudulent activity, accurately predicting and preventing fraud, allowing banks to take immediate steps to mitigate potential losses.
As well as Malaysian banks, three local banks in Singapore Self-service money lock feature Allow consumers to block their bank accounts if they suspect fraudulent activity has occurred with their funds.
Collaboration between industry players and regulators
Another important aspect in the fight against fraud and fraudulent activity is collaboration between industry players and regulators. Sharing key information about emerging fraud trends allows banks to stay ahead of the curve and adjust their security measures accordingly.
“A strong cybersecurity approach should include consumer education and advanced technology to address the complex threats posed by cybercriminals.”
Frederick said.
For example, in Singapore, the Monetary Authority of Singapore (MAS) Established the Anti-Fraud Centerbrings together banks, telecommunications companies and other stakeholders to coordinate anti-fraud efforts.
Also, to raise awareness and prioritise transparency among service providers and the general public, MAS and the Infocomm Media Development Authority (IMDA) Consultation document proposing a Shared Responsibility Framework (SRF).
The framework aims to distribute liability for fraud losses among banks, carriers and consumers, particularly with regard to fraudulent transactions resulting from phishing scams.
Under the SRF, responsible financial institutions are required to meet certain anti-fraud obligations to protect consumers, and carriers must provide real-time notification alerts and act quickly to block suspicious numbers. There is a risk of severe penalties.
Meanwhile, real-time notifications empower consumers to instantly report suspicious activity to financial institutions so that timely corrective action can be taken. This collaborative approach ensures that best practices are shared across the banking industry and that we stand united against a common enemy: fraud.
The benefits of digital identity verification go beyond security
The adoption of complete and flexible identity verification platforms like Jumio is becoming increasingly important in the fight against fraud and AI-enabled fraud. These technologies provide financial institutions with a secure and reliable way to verify their customers’ identities, reducing the risk of identity theft and account takeover.
Adding passive risk signals to the KYC process, such as verifying a user’s location via IP address or assessing the reputation of their email or device, provides an extra layer of protection.
The benefits of digital identity verification go beyond enhanced security: these networks help banks improve customer experience and reduce operational costs by streamlining the customer onboarding process and reducing the need for manual identity checks.
Additionally, by collaborating with industry peers through trusted identity networks, financial institutions can share information about known fraudsters and suspicious activity to build a more robust and resilient online ecosystem.
As the digital landscape continues to evolve, it is important for businesses to remain vigilant and proactive in their security efforts to stay one step ahead of fraudsters. To learn more about the Jumio Platform, Contact Jumio today.
Featured Image Credit: Free Pick
