The financial fraud shift: Changing dynamics in APAC 

In August, LSEG Risk Intelligence hosted a webinar that looks at shifting financial fraud dynamics, shares insights into some important Interpol anti-fraud initiatives, and offers practical advice on how you can turn financial fraud risk into resilience.

Global fraud is now a widespread and evolving threat that is becoming harder to define and harder to control. This is the view of panellists in our latest LSEG Risk Intelligence webinar“The APAC Financial Fraud Shift: What You Need To Know”, available on demand.

The scale and seriousness of global fraud cannot be over-emphasised:

   Estimated losses per annum as a result of global fraud are now approaching US$5trillion [Note 1].

Gokce Arslan Kumar, Senior Manager, Research Knowledge Management, LSEG Risk Intelligence stresses, however, that the true scale of this global phenomenon is likely much larger than the numbers suggest. Fraud is typically difficult to quantify with any accuracy, in part because victims do not always come forward.

This silence creates challenges for regulators and makes the problem that much harder to solve. Beyond the numbers, Gokce further reminds us that fraud is not just about financial loss, it is also about trust erosion.

Within the APAC region, the top fraud concern currently cited is scams – specifically types that include deceptive practices that exploit human psychology, emotions and social dynamics to trick victims. These types of fraud rely less on technical methods, such as hacking, and more on influencing behaviour and manipulating trust.

The current financial crime landscape is one of shifting trends, in which criminals deceive victims and evade detection by exploiting gaps in fraud protection programmes. This space is cyber-driven and shows substantial diversity in victim profiles, with criminals exploiting different vulnerabilities according to their target’s unique circumstances.

While a wide range of “major” fraud types exists, identity-based fraud has become a particular concern. A webinar poll reveals that synthetic identity fraud – where perpetrators blend real and fake data, making it particularly hard to detect – is the second most challenging type of fraud that participants tackle. Cross-border payment fraud tops the list.  

Gokce underscores the gravity of identity fraud, commenting, “Identity is now a dynamic, high value asset to manage, and identity verification is no longer just a compliance requirement, it is part of your front-line defence.”

She also stresses that, according to LSEG World-Check data, fraud is “interlocked with over 64 financial crime types”, positioning it as a funding device, and not just a criminal activity.

Hyemin Lim, Coordinator at Interpol Financial Crime and Anti-Corruption Centre, outlines a number of Interpol initiatives, including the Global Rapid Intervention of Payments that have been developed to fight back against these rising threats.

The organisation supports victims of fraud and financial crime in a range of ways, from investigative support to raising awareness of growing crime.

A pertinent example is the flagship initiative Operation HAECHI, which focuses on cyber-enabled crime. A notable case under HAECHI was that of a global Ponzi scheme that defrauded thousands of victims in Korea and Poland, with losses amounting to €28million. The scheme was successfully uncovered, halted and a number of arrests were made.

Lim stresses that reporting of all crimes is crucial, and that swift communication with Interpol makes all the difference – particularly with asset recovery. Any lack of timely reporting complicates the process of halting fraud and recovering funds.