63% of fraudulent cases in Malaysia occurred online
THE majority of the fraudulent cases occurred in Malaysia were transacted through various platforms of the online medium, according to a study.
The LexisNexis Risk Solutions’ report on True Cost of Fraud on Asia Pacific revealed that approximately 63% of the fraudulent transactions were conducted through the web browser accessed through a personal computer or laptop and mobile devices.
“63% of fraud comes from online channels web and mobile, compared to 35% in-person at a store or kiosk,” the study said.
“Fraud tools need to authenticate both the digital and physical criteria as well as identity and transaction risk,” it added.
The report said every fraudulent transaction cost Malaysian businesses 3.57 times of the lost transaction value.
“This translates to fraud costs amounting to 1.93% of annual revenues overall and some of this could relate to a 78% year-on-year growth in the attack rate in financial services for new account creations in the region,” it said.
The report, which studies the current fraud trends in the retail, e-commerce and financial services in the Asia Pacific markets, stated 31% of the fraudulent cases were due to the identity theft.
“Fraudulent account creations and takeovers represent a significant portion in identity-based fraud compared to those that are coming from purchases or transactions.
It added that synthetic identities, which one of the factors that contribute to identity theft, are comprised of real and fake personal information that makes the activities difficult to detect with traditional verification methods.
“Identity theft is one of the most reported cybercrimes in Malaysia and verifying customer identity is the most cited challenge for all channels, which exacerbated by the rise of synthetic identities and limited tracking tools,” it said.
“Even though mobile-commerce transactions carry a higher level of fraud risk, businesses are increasingly accepting these transactions primarily due to customer convenience and its competitiveness,” it said.
It added the survey’s respondents believe that while online commerce increases the risk of fraud, the platform is too important to ignore.