A leading global analytics software firm recently unveiled its latest global consumer fraud research, shedding light on Filipinos' ongoing apprehension regarding real-time payment scams amid the growing adoption of new, convenient, fast payment channels.
According to the study, the primary worry for Filipinos remains the risk of being tricked into sending money to criminals (35 percent), which exposes individuals to instant, irrevocable losses rarely eligible for reimbursement.
Additionally, concerns about identity theft persist, with over 23 percent of Filipinos citing it as their top financial crime concern. This type of fraud carries additional risks beyond financial loss, such as compromised credit scores and the challenging process of restoring financial integrity.
"The Philippines' adoption of real-time payments continues to accelerate, with 98 percent of adults having sent a real-time payment and 65 percent expecting to increase their use over the next year," said C K Leo, lead for fraud, security and financial crime in Asia-Pacific at analytics software firm FICO.
"As the adoption of real-time payments surges, driven by platforms like Maya, GCash and GrabPay, we're witnessing a transformative shift in financial behavior. Yet, amid this rapid digitization comes an urgent need for heightened vigilance against fraudsters lurking in the digital realm."
Real-time payment scams
As the incidence of scams continues to rise, FICO's commissioned research from last year uncovered a troubling trend concerning authorized push payment (APP) fraud and real-time payments in the Philippines. A concerning 82 percent of Filipinos have received unsolicited text messages, emails, phone calls or other outreach that they believed to be part of a scam, while 61 percent of respondents stated that their friends or family members had been victims of a scam.
Shockingly, 25 percent of respondents admitted to sending real-time payments for investments, goods or services they never received. Additionally, 74 percent of those who made scam payments through real-time payments lost up to P25,000, while 1 percent experienced losses of up to P300,000. Despite these alarming figures, only 26 percent reported actual or suspected losses to their banks.
"Banks now face a crucial moment to invest in cutting-edge solutions to tackle the surge in scams, particularly with the swift uptake of real-time payments in the Asia-Pacific financial landscape," said Leo. "The irrevocable nature of these transactions has led to new criminal threats. By integrating scam-specific analysis and scoring into transactions, along with robust decision-making capabilities across the customer journey, banks can pre-emptively detect and thwart scam payments, sparing customers from financial harm. Furthermore, while some consumers may ignore warnings, the majority will heed alerts and refrain from making real-time payments if alerted to potential scams."
Perception vs reality
Despite widespread concern about identity theft, there is a noticeable dissonance between perception and reality among Filipinos. About 33 percent believe it's unlikely they've been a victim, while 19 percent see it as possible, and 27 percent are confident their identity remains untouched.
Moreover, only 5 percent of Filipino respondents reported their stolen identity being used to open a financial account, a slight increase from 4.5 percent in 2022. However, given the adult population in the Philippines, this 5 percent translates to over 3 million individuals. Interestingly, this rate was much higher in other countries surveyed, with 13 percent of Indians and 12 percent of Thais saying their identity had been stolen and used to open an account by a fraudster.
"While some may downplay the risk of identity theft in the Philippines, millions remain vulnerable," added Leo. "This underscores the need for heightened awareness and proactive measures. By breaking down silos and integrating identity verification and fraud detection processes, we can streamline applications and bolster trust in legitimate customers."
Good fraud protection
When asked about the most important considerations respondents have when they select a new provider for a financial account, good fraud protection and ease of use were the two most important. These were both considered significantly more important than good customer service, strong anti-money laundering policies, sound green/environmental policies, ethical use of customer data, behaving fairly, and good value for money.
Source: Manila Times
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