While ecommerce in Asia Pacific is booming, one in five online customers has already fallen victim to fraud attacks, according to the Digital Consumer Insights 2018 report from global IT services company Experian.
The report is based on a consumer survey across 10 APAC markets – Australia, New Zealand, China, Hong Kong, India, Indonesia, Japan, Singapore, Thailand and Vietnam.
The study surveyed how well businesses mitigate fraud risk through the eyes of their customers and found that as brands and consumers look for ever-easier ways to buy and sell products online and via mobile devices — with electronics, travel and groceries being the most popular — the opportunity for online fraud is escalating.
The survey found that more than half (51%) of consumers would switch service providers in the event of fraud, which Experian says proves that consumers are willing to trade convenience and a better customer experience for better fraud protection.
The report — a companion to Experian’s Fraud Management Insights 2017, which looked at fraud through the eyes of enterprises — also found distinct differences in consumer attitudes between countries.
In mobile-led, emerging markets, people are more convenience-driven and less risk-averse, with the more security-conscious individuals tending to come from mature economies.
“We notice that in more mature economies like Hong Kong and Singapore, consumers are largely more aware of fraud risks and act in a more conservative manner,” Elliott said. “This means they may sometimes avoid transacting online should they perceive a potential fraud risk. This is in contrast to emerging economies like Vietnam, where consumers are less fraud-aware and more convenience-driven.”
Experian says that while greater digital convenience is linked to higher fraud exposure — presenting a problem for both consumers and businesses — the report also revealed that there was a silver lining.
It found that as consumers became aware of the risk of fraud, they were more likely to want to adopt security measures like biometrics, including fingerprint, facial and voice recognition.
While adoption of biometrics for security benefits is strong, Experian says the study found that Australian consumers are the least likely to share their personal data with businesses, or use biometrics for commercial purposes.
According to the report, Australians are especially cautious about supplying personal data in high-risk environments, such as public Wi-Fi networks, and 22% would refrain from doing so, compared to 19% across APAC.
In APAC, 13% of consumers are now willing to adopt biometrics, with India (21%), Vietnam and China (both at 18%) leading the charge as early adopters.
The survey found that Australia (9%), Japan and New Zealand (both 8%) were the least willing to now adopt biometrics..
“Interestingly, however, a significant 57% of consumers are already comfortable with biometrics in government/non-commercial applications,” Experian observes.
“As acceptance extends into the commercial sphere, this new technology will increasingly be able to provide a more efficient customer experience and enhanced fraud protection.”
Experian suggests that at present, one of the best ways companies can protect their customers is by leveraging high-quality customer data to effectively verify transactions – although the report found that this was easier said than done.
The findings detailed that consumers were often selective in the type of information they were willing to share with companies, and were clear on how they would want the data to be used.
For example, when asked, 43% of consumers were willing to have their personal data shared with businesses specifically for better fraud detection over convenience or a better customer experience.
And 5% of APAC consumers said they had intentionally submitted inaccurate information to avoid disclosing personal data, while 20% had made mistakes in the details they provided to businesses.
Data input errors were highest in Thailand, followed by Vietnam, Indonesia and India, while Japan had the lowest erroneous submissions followed a long way behind by Singapore and Hong Kong.
According to Elliott, this points to a gap in trust between businesses and their consumers, but also provides a significant opportunity for them to make improvements.
“Intentional non-disclosure of information heightens the challenges businesses already face in combatting fraudsters and ascertaining the identity of genuine customers.
“We believe that this is fundamentally an issue of trust – and companies must do more to communicate the value to consumers about the use of data for fraud protection and that they can be trusted as custodians of personal data.”