Mobile and financial industries to combat online fraud in Southeast Asia through new API solutions
More than half of online consumers surveyed across Southeast Asia have expressed growing concerns around online security when using digital banking and shopping services, according to a new report released recently by the GSMA.
The report, titled “Consumer Attitudes Toward Fraud and Opportunities for Mobile Network Operators in Southeast Asia” reveals that more than a quarter of respondents from across Indonesia, Malaysia, the Philippines, Singapore and Thailand have been victims of financial crimes, such as online hacking, identity theft and bank card theft. In Singapore, the country where digital commerce is most prevalent, some 42% of respondents said they have been a victim of financial fraud.
Unveiled at the GSMA’s Digital Nation Summit in Manila today, the report shows that consumers in Southeast Asia ultimately hold banks and fintech firms responsible for safeguarding them against financial crimes. However, a significant number also expect mobile device manufacturers and network operators to play a key role in protecting them from cybercriminals.
With this in mind, the GSMA has created the APAC Fintech Forum to bring the mobile ecosystem together with fintech and online commerce providers to collectively embrace a responsibility to build safe, secure and inclusive digital nations. In an additional report launched today called “Unlocking Innovation: The Role of MNO APIs in Transforming Financial Services and Digital Commerce in Southeast Asia” the GSMA outlines clear areas where mobile and fintech industries can work together to develop more secure services using API-driven solutions, supported by the GSMA Open Gateway initiative.
Julian Gorman, Head of Asia Pacific, GSMA, said: “The evolving digital landscape of Southeast Asia presents both significant opportunities and challenges for consumers, businesses, and service providers alike. Online fraud and scams have emerged as a critical concern, necessitating robust and innovative responses. To protect consumers digital trust, mobile operators and digital commerce ecosystem must work more closely together to address these challenges and utilise their technical capabilities and extensive user reach to mitigate opportunities for bad actors.”
Key Findings:
- Rising Fraud Concerns: Fraud, particularly online financial transactions, is one of the greatest concerns of consumers in Southeast Asia. More than half of the respondents across all five markets expressed fears about the rising likelihood of fraud and hacking. These concerns are particularly pronounced in Indonesia and Malaysia, where nearly 43% and 34% of respondents, respectively, said they were “very worried” about becoming a victim of fraud. Singapore and Malaysia report the highest levels of direct fraud experience, with over 30% of respondents having encountered financial fraud at least once. In contrast, Thailand and Indonesia report lower but still significant levels of fraud experiences, with between 20-26% of respondents indicating that they have been affected.
- SIM-Swap Attacks: This type of fraud, in which a hacker gains control of a mobile number by transferring it to a new SIM card, is a significant worry in several markets. Indonesia (78%) and the Philippines (71%) report the highest levels of concern about SIM-swap fraud, while Singapore, though relatively more secure, still sees 50% of consumers highly concerned.
- Mobile Payments and E-Wallets: With the increasing adoption of mobile wallets and digital payments across the region, many consumers are worried about the potential vulnerabilities of these platforms. Malaysia (75%) and Indonesia (91%) show particularly high adoption rates of e-wallets, and with that comes heightened concern of consumers about fraud.
- Personal Data Theft: Across all five markets, consumers expressed serious concerns about the protection of their financial data. More than 60% of respondents in Malaysia, Indonesia, and the Philippines are very worried about the misuse or theft of Personally Identifiable Information (PII) and financial data.
How Mobile and Digital Commerce Industries Can Take Action:
By working together on essential initiatives to enhance security the mobile and fintech companies can help address fraud concerns. One critical area is the implementation of new enhanced security Application Programmable Interfaces (APIs). These new two-factor authentication (2FA) and SIM-swap prevention APIs, developed through the GSMA Open Gateway initiative, can help online financial institutions, payment firms and online retailers bolster account bolster account security.
“These measures can significantly reduce the risk of unauthorised access and fraudulent activities, providing consumers with greater confidence in the security of their financial transactions,” said Gorman.
During the GSMA’s Digital Nation Manila Summit taking place this week, industry leaders, policymakers, and innovators will explore the critical role of mobile technology in ensuring digital trust and driving economic growth to create a more inclusive digital future. Leaders from the Philippines’ Department of Information and Communications Technology, Globe Telecom, Smart Communications, Meta, the Asian Development Bank and RCBC will discuss how leveraging technology and forming partnerships is essential to protect consumers and maintain trust in digital platforms.
Southeast Asia has one of the world’s most innovative mobile ecosystems, when it comes to combatting online fraud through the GSMA Open Gateway initiative. However, more financial institutions and online retailers need to adopt the technology. Earlier this year, Singapore’s Singtel announced it would work with Thailand’s AIS and Malaysia’s Maxis to fight rising digital scams. Using Singtel’s SingVerify service, they will help prevent incidence of illegal account takeovers and unauthorised transactions that result from phishing and malware app scams. Indonesia’s four major operators have launched new services to tackle fraud and in the Philippines Globe Telecom and Smart Communications are supporting the initiative.
