Thriving E-commerce Means Increased Fraud Exposure

Thriving E-commerce Means Increased Fraud Exposure

Bangkok, May 16, 2018: Three quarters of Thai consumers are making online purchases, with Beauty and Fashion and Electronics being the top categories. However, as consumers continue to look towards convenience, fraud exposure will likely increase - these are the findings of the Digital Consumer Insights 2018 by the world’s leading information services company Experian, co-authored with leading ICT market research and advisory firm IDC.


The Digital Consumer Insights 2018 report is based on a consumer survey across ten APAC markets including Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand, Singapore, Thailand and Vietnam. It looks at how businesses fare in fraud management, through their customers’ eyes and is a complementary report to the Fraud Management Insights 2017 report which looked at fraud management through the eyes of enterprises.


The report found that there was an interplay between convenience and fraud. With the growth of convenient interaction and transaction platforms such as frictionless payments, and a continuous goal to provide better and seamless customer experiences, opportunities for fraud increases.


“Thailand’s e-commerce market is rapidly growing, with 73% of respondents having made online purchases,” said Dev Dhiman, Managing Director, Southeast Asia and Emerging Markets, Experian. “However, fraud rates are also high, with an average of 19% of Thais having experienced fraud across various e-commerce and services segments, and more than half of our respondents (51%) intending to switch service providers when fraud occurs.”


“Unfortunately, the reality is that greater digital convenience is linked to higher fraud exposure. However we also found that greater fraud exposure may lead to consumers being more likely to adopt convenient security measures like biometrics – which will allow businesses to ensure a seamless customer experience while managing fraud.”


While the Thai government has begun pushing out biometrics registration (e.g. fingerprinting, facial and voice recognition) nationwide for sim card signups to combat electronic fraud and enhance mobile banking security, only 15% of respondents in Thailand indicated they were willing to adopt biometrics in commercial applications. Thais rank fourth in their willingness to adopt biometrics, after the other developing economies of India, China, and Vietnam.


The Vicious Cycle of Fraud Response: Managing the Fraud Response Cycle and Negating Business Risks

The research found that mismanagement of fraud response results in two different types of losses for companies, due to differing reactions from consumers which are based on their risk attitudes and perceptions. The report identified two groups of consumers, the Digital Voyagers and the Digital Pragmatists. Digital Voyagers dominate in mobile-led, emerging economies and they are more convenience-driven and less risk-averse. On the other end of the spectrum are Digital Pragmatists who tend to come from mature economies and are more cautious and concerned about security.


“Understanding the difference between Digital Voyagers and Digital Pragmatists is important for companies as they react differently to fraud,” said Dhiman. “In the case of Digital Voyager centric countries, like Thailand, companies may face escalating fraud costs as digital consumption continues and companies absorb fraud losses to retain customers. In Digital Pragmatist centric countries like Hong Kong, people are more likely to avoid digital transactions in fear of fraud and this results in a loss of digital revenue for businesses.”


Consumers’ Willingness to Share Data

One of the ways companies can help protect against fraud is to have high quality information about their consumers so that they are able to properly verify transactions. When asked, 51% of Thais are willing to have their personal data shared with businesses specifically for better fraud detection.


Consumers are also selective in the information they share with companies, with 3.8% of Thais saying that they have provided inaccurate information to avoid disclosing personal data. This is lower than the APAC average of 5%. Thais are also the most likely in the region to supply inaccurate information to companies, with 35% having made mistakes in basic personal details like addresses, phone numbers and names, 25% having made mistakes in providing highly guarded personal information like payment details, and 30% having given wrong information relating to their age, gender, income and education level.


“Across the region, we found that there is a trust gap between people and organisations,” said Dhiman. “Consumers are submitting inaccurate data or purposely omitting important information to companies. This, unfortunately, results in it being more difficult for businesses to identify their customers online and fight fraud effectively. With the acceleration of the digital economy, fraud challenges will only grow and companies must ensure they leverage the right technologies and solutions to address the complexities of the digital age.”


Findings of Thailand Consumer Behaviours and Attitude

Japan, New Zealand, Australia, Hong Kong, Singapore are Digital Pragmatist Centric Countries – where consumers have higher risk perceptions and feels security is more important than convenienceThailand, Indonesia, China, India, Vietnam are Digital Voyagers Centric Countries – where consumers are less risk averse and less guarded in sharing their dataThai Consumer Behaviour Examples

Fraud is not acceptable


Higher tendency to switch providers in event of fraud

Lower tendency to switch providers in event of fraud

Thais have the fifth highest direct fraud exposure in the region (19%), the lowest rate among emerging economies.


51% of Thai consumers will switch service providers when fraud occurs and 84% believe that fraud is unacceptable.

Lower willingness to share data to get better experience


More accurate / Higher quality of submitted data

Higher willingness to share data to get better experience


Lower quality of submitted data

51% of Thais are willing to share data for fraud detection (43% APAC Average).


Only 17.5% of Thais are concerned about supplying personal data in a high-risk environment like a public Wi-Fi network compared to 22% in Australia. They are the third least concerned country in the region after Japan (12%) and Indonesia (14%). 


Notably, the study found only a weak link between consumers being selective and guarded with their data, and with fraud, indicating businesses should not depend on consumer actions alone to reduce fraud.


Rates of mistaken information provided to companies are high in the country, with 35% of respondents saying that they have made an error in providing basic personal data.

Lower consumption of digital services


Lower adoption of mobile payment

Higher consumption of digital services


Higher adoption of mobile payment

Thais were willing to pay up to USD140 per mobile or contactless payment transaction, second in the region behind Australia at USD143 per transaction. Japan and Vietnam were the lowest at USD92 and USD89 per transaction.


They have the third highest percentage of mobile spend limit as a percentage of monthly income, at 25.1% behind Vietnam at 51.4% and Indonesia at 47.9%.


To download Digital Consumer Insights 2018, please visit: /insights/digital-consumer-insights-2018

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By Experian 05/16/2018

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