In a survey conducted at a recent forum hosted by analytics and decision management software firm Fico, heads of fraud from across the Asia Pacific region said that card not present (CNP) fraud is the fastest-rising area, with 94 percent of attendees reported a rise in CNP fraud.
Mitigating CNP fraud is especially critical in Asia Pacific, with the region set to overtake North America as the largest e-commerce market in the world.
Research firm eMarketer estimates that B2C e-commerce sales in Asia Pacific this year will reach $525.2 billion, versus $482.6 billion in North America.
Fico estimates that card fraud now costs Asia Pacific financial institutions some $360-420 million each year, and losses are growing at an annual rate of 20-25 percent.
?Regional consumers have become more accepting of non-traditional banking platforms, substituting cash for mobile and online transactions,? said Dan McConaghy, president for Fico in Asia Pacific, who hosted the Asia Pacific Fraud Forum in Singapore.
?As this shift occurs, we see criminals using social engineering, application fraud, data breaches and more to obtain card details. In order to maintain a positive customer experience, banks need to enhance such physical measures as chip and PIN cards, secured ATMs and one-time-passwords with solutions like predictive analytics. There?s an increasing need for a way to act in real-time across multiple channels,? McConaghy said.
Fico?s predictive analytics use statistical models to analyze streaming live data sets and detect fast moving patterns of fraud. 15,000 calculations are completed in milliseconds once a credit or debit card is swiped to detect if fraud has occurred.
Recent studies have shown that the poor handling of fraud is a key reason for losing a customer?s trust. A 2013 study by MasterCard found that 40-45 percent of Asia Pacific consumers will change card providers after experiencing fraud.
?Banks understand that consumers have so many choices these days that a badly handled fraud case can cause a customer to stop using its services entirely and move to another bank,? said McConaghy.
?You don?t get a second chance these days. Reputations are built on the ability to provide trusted and convenient services while protecting a cardholder?s funds and data.?