Asian Banks Lead the Charge in AI-Powered Fraud Prevention

Asia is ahead of the curve of using AI to fight fraud. Here's what the rest of the world can learn from it

The financial sector is going through a rapid digital transformation, but cybercriminals are adapting just as quickly. Banks are forced to spend heavily to keep ahead of surging financial fraud. Across the Asia-Pacific region, 98% of financial institutions have had to scale up their compliance operations, driving costs above $45 billion. This surge reflects a shift toward integrated anti-fraud strategies, with governments and industries rolling out targeted national responses to counter increasingly sophisticated threats. Hong Kong authorities have launched Scameter, a mobile fraud alert system that that notifies users of high-risk transactions. Singapore has introduced the Shared Responsibility Framework, which allocates scam loss responsibilities to financial institutions and telecommunication operators, encouraging the implementation of anti-scam measures. Similarly, Australia's Scam-Safe Accord is a cross-industry initiative across banks, building societies, credit unions aimed at elevating the standard of customer protection to counter scams. These moves all represent a strong response to a growing regional threat, exemplified by Southeast Asia's "scam compounds": physical hubs where criminal syndicates orchestrate large-scale online scams, including identity fraud, phishing, fake investments and money laundering. Disguised as legitimate businesses, these sophisticated operations generate billions of dollars annually. What's driving this evolution in financial crime? Increasingly, it's artificial intelligence. Criminal networks use AI to create synthetic identities, launch massive phishing campaigns, and bypass traditional security systems -- and do so with fewer resources and in record time. While scam compounds are concentrated in Asia, the threat of financial fraud is global. Yet as Asia's crime syndicates make headlines, the region's banks are quietly leading a shift in how to prevent fraud. Unlike other banks, which use AI for customers personalization and call center support, Asian banks are instead tapping AI to fight back against cybercriminals through fraud detection, identity verification, and anti-money laundering. Asia's greater focus on AI-powered fraud prevention is due to the region's exposure to financial crime. Asian institutions are in the trenches when it comes to cybercrime, pushing them to rapidly adopt AI-driven strategies. The scale of financial loss is staggering. In 2024 alone, the Asia-Pacific region lost an estimated $688 billion to fraud, nearly two-thirds of the world's total. Asians' rapid adoption of digital wallets and payment platforms makes matters worse: By outpacing the rollout of strong consumer protections, this usage opens doors for cybercriminals and is putting banks on the front lines. Asian banks are leading the way in adopting ISO 20022, a new messaging standard that allows financial institutions to use AI to precisely detect anomalies and cut exposure to financial crime. Regional priorities are shifting as banks adopt AI. Asia-Pacific banks are focusing on fraud prevention and security, while European and U.S. institutions instead use AI to personalize products and customer service. According to our research, just over half of organizations in the UK want to use generative AI to enhance the customer experience. That reflects the UK's hyper-competitive market, where user-friendly interactions are key to winning customer loyalty. The U.S. is splitting its AI focus between customers experience and operational automation, supporting both consumer demands for frictionless banking and internal goals for efficiency. In contrast, 58% of Asia-Pacific banks are focusing their AI investments on fraud detection and anti-money laundering, well above the global average. Asia-Pacific banks face a high-risk landscape where criminal networks use generative AI for identity fraud, phishing and financial scams. As a result, the region prioritizes cybersecurity, forging a sharper, security-focused AI strategy that views fraud prevention as a key competitive advantage. Importantly, AI is blurring the distinction between security and service. Growing cyber threats means customers expect their banks to not just protect their money, but also provide clear, accurate answers in times of uncertainty. Our work with clients reveals that AI-powered chatbots and authentication systems can speed up queries from banking staff by sourcing information for them 30-40% faster than before. This has in turn had a knock-on effect for customer satisfaction, with customers now rating their experiences with chatbots 25% higher than their previous conversations with human agents. Fraud detection can't be isolated in today's threat landscape. It must be embedded within financial infrastructure. Whether that's through cross-industry accords like Australia's Scam-Safe Accord, or through the blend of service and security seen in AI-powered chatbots that both authenticate users and resolve queries in real time, APAC is demonstrating how integrated systems can turn raw data into actionable defenses, driven by AI and aligned with operational needs. Asia-Pacific's experience highlights that financial security hinges on being proactive, not reactive. Faced with massive fraud losses and complex scam networks, Asian institutions have swiftly prioritized AI-driven fraud prevention. U.S. and European peers, on the other hand, treat fraud prevention as one possible AI application among many. That will be a mistake as AI-driven financial crime starts to spread globally. AI's role in fraud will grow. Asia-Pacific's strategy shows the value of acting quickly to counteract it, integrating fraud prevention into financial infrastructure. As global threats escalate, the world should look to Asia, not just as a regional leader, but as a role model for secure, seamless financial transactions.

Asian banks fight fraud with AI, ISO 20022

Asian financial institutions are adopting AI-driven strategies to combat cybercrime, as the financial sector undergoes rapid digital transformation. This addresses surging financial fraud and increased compliance costs across the Asia-Pacific (APAC) region. In the Asia-Pacific region, 98% of financial institutions have scaled up compliance operations, pushing costs above $45 billion. Governments and industries are implementing national responses to sophisticated threats, integrating anti-fraud measures. Hong Kong launched Scameter, a mobile fraud alert system. Singapore introduced the Shared Responsibility Framework, allocating scam loss responsibilities to financial institutions and telecommunication operators to promote anti-scam measures. Australia's Scam-Safe Accord is a cross-industry initiative among banks, building societies, and credit unions to enhance customer protection against scams. These responses counter a growing regional threat, including Southeast Asia's "scam compounds." These physical hubs, disguised as legitimate businesses, are used by criminal syndicates to orchestrate large-scale online scams, such as identity fraud, phishing, fake investments, and money laundering, generating billions annually. Artificial intelligence drives this evolution in financial crime. Criminal networks use AI to create synthetic identities, launch massive phishing campaigns, and bypass traditional security systems with fewer resources and in record time. While scam compounds are concentrated in Asia, financial fraud poses a global threat. Asian banks are shifting fraud prevention practices. Unlike other banks that use AI for customer personalization and call center support, Asian banks utilize AI for fraud detection, identity verification, and anti-money laundering. This focus is due to the region's exposure to financial crime, driving rapid adoption of AI-driven strategies. The financial losses in Asia are substantial. In 2024, the Asia-Pacific region lost an estimated $688 billion to fraud, nearly two-thirds of the world's total. Rapid adoption of digital wallets and payment platforms in Asia has outpaced consumer protection rollouts, creating opportunities for cybercriminals and placing banks on the front lines. Asian banks are also leading in adopting ISO 20022, a new messaging standard that enables AI-driven anomaly detection and reduces financial crime exposure. Regional priorities for AI adoption vary. Asia-Pacific banks focus on fraud prevention and security. In contrast, European and U.S. institutions use AI for product personalization and customer service. Data indicates that just over half of organizations in the UK aim to use generative AI to enhance customer experience, reflecting a hyper-competitive market where user-friendly interactions are crucial. The U.S. splits its AI focus between customer experience and operational automation, addressing both consumer demands and internal efficiency goals. In the Asia-Pacific, 58% of banks invest their AI resources in fraud detection and anti-money laundering, exceeding the global average. Facing a high-risk landscape where criminal networks use generative AI for identity fraud, phishing, and financial scams, the region prioritizes cybersecurity. This results in a security-focused AI strategy that views fraud prevention as a competitive advantage. AI is also integrating security and service; customers expect banks to protect money and provide clear answers. AI-powered chatbots and authentication systems can speed up banking staff queries by 30-40%, leading to a 25% increase in customer satisfaction with chatbots compared to human agents. Fraud detection must be embedded within financial infrastructure. Asia-Pacific demonstrates how integrated systems, like Australia's Scam-Safe Accord or AI-powered chatbots that authenticate users and resolve queries, convert raw data into actionable defenses. Asia-Pacific's experience underscores the importance of proactive financial security. Facing significant fraud losses and complex scam networks, Asian institutions have prioritized AI-driven fraud prevention. While U.S. and European institutions treat fraud prevention as one of many AI applications, the escalating global threat of AI-driven financial crime suggests this approach may be insufficient.