APAC Fraud Trends | The Sumsuber

7 Fraud Trends in the APAC Region in 2024

Deepfakes, identity fraud, and APP fraud—what else is a threat to the APAC economy?

Alisa Abramova
Managing Editor

The Asia-Pacific region is quickly turning into the most digitally advanced region in the world. According to Mordor Intelligence, the APAC e-commerce market size is estimated at USD 4.20 trillion in 2024, and is projected to reach USD 6.76 trillion by 2029, thanks to the region’s high number of mobile users and young population.

The high speed of digitalization in the region certainly has its benefits, but it doesn’t come without risk. This includes fraud.

According to Sumsub’s most recent Identity Fraud Report, Indonesia, Hong Kong, and Cambodia have more than doubled their identity fraud percentages between 2021 and 2023, indicating a growing regional concern. Let’s discuss the fraud trends relevant to the APAC region, uncovering which countries are especially vulnerable to fraud—and which ones successfully fight it.

1. Fake documents

Fake IDs are counterfeit or falsified documents that misrepresent the identity of an individual. They’re often used for various illegal purposes, such as purchasing age-restricted products, financial fraud, identity theft, and much more. Fake IDs were among the top five fraud trends last year, according to Sumsub's Identity Fraud Report.

Sumsub’s 2023 Fraud Report also revealed that, in 2023, Bangladesh and Pakistan had the highest fraud rates in the world, with fraud accounting for 5.44% and 4.59% of all verifications performed in each country, respectively. Vietnam saw a surge in identity fraud cases in 2022, reaching 9.94%, before significantly decreasing to 1.38% in 2023. At the same time, Singapore reduced its fraud cases in 2023, while Japan, Australia, and Thailand remained relatively stable, with percentages staying under the 2% over the years.

Reliable KYC, biometric authentication, document verification, behavioral analytics, and machine learning-driven fraud detection algorithms are the best tools in fighting identity fraud, including fake IDs. Document-free verification methods, such as Sumsub’s Non-Doc and GDV, can also significantly help here.

2. AI generated Fraud: Deepfakes and synthetic fraud

As AI gets cheaper and more widely available, it’s being used both for good and evil, including fraud.

Deepfake fraud involves the use of artificial intelligence and machine learning algorithms to create highly-realistic audio or video content with the intent to deceive or manipulate.

In the APAC region, the average increase in the number of deepfakes detected in 2023 was 1530%. It is worth noting that the majority of deepfake cases occurred in Vietnam (25.3% of all deepfakes in the region) and Japan (23.4%).

Japan is known for its use of deepfakes in the entertainment sector, which may enable fraudsters to exploit this technology in other fields. Vietnam, on the other hand, has a growing digital economy and large online population which makes the country attractive for fraudsters.

Ways to spot deepfake and synthetic identity fraud:

3. Money muling

According to Sumsub’s 2023 Identity Fraud Report, money muling networks are one of the top-5 global fraud trends, and this trend is observed in Asia as well.

Money muling involves seemingly innocent individuals, known as money mules, who are recruited to transfer illegally obtained funds, disguising their origin.

According to Singapore Police data, 4,800 people were arrested or investigated for money muling in the country in 2020. In 2022, this figure increased two-fold. A study by the Singapore Police Force involving 113 money mules linked to scam cases reported between 2020 and 2022 found that about 45 per cent were 25 or younger.

To spot money mules, Customer Due Diligence (CDD) is essential. CDD verifies the customer and their documents, assigns a behavioral risk score, searches blocklists, and does adverse media screening.

4. Social engineering and APP fraud

One of the frequent consequences of social engineering is Authorized Push Payment (APP) fraud, which is also a growing trend in APAC. APP fraud, also known as bank transfer fraud, occurs when individuals or businesses are tricked into authorizing a payment to an account that they believe belongs to a legitimate payee.

Recently, a finance worker in Hong Kong fell victim to APP fraud, where criminals utilized deepfake technology to impersonate their company's Chief Financial Officer during a video conference call, resulting in a fraudulent payout of $25 million.

5. Phishing

Phishing is when fraudsters trick people into disclosing sensitive information, including login credentials, payment info, and sensitive personal data. According to Singapore's Cyber Security Agency, phishing attempts targeting local businesses more than doubled in 2022, rising from 3,100 to 8,500 cases.

6. Payment fraud

Payment fraud aims to exploit vulnerabilities in payment systems and compromise financial transactions. According to the recent BioCatch report, scams constitute 54% of all digital banking fraud in the APAC region.

7. Account takeover

According to Sumsub’s internal statistics, global account takeover incidents increased by 155% in 2023. Account takeovers involve unauthorized access to user accounts, often achieved through the use of stolen login credentials.

Conclusion

The rise of the APAC digital economy is likely to lead to an increase in fraudster attacks. Companies must implement effective internal controls such as CDD and behavioral analytics, utilize AI, and ensure ongoing monitoring to combat fraud.