GBG Research: Malaysia Ahead of APAC Region in Launching Digital Banking and Cashless Financial Services

KUALA LUMPUR, 1 October 2020 – GBG (AIM:GBG), the global technology specialist in fraud and compliance management, identity verification and location data intelligence, has today launched its inaugural report in Malaysia, titled "Future-proofing Fraud Prevention in Digital Channels: Malaysia FI Study". The report analyses the impact of fraud on financial institutions (FIs) across six countries and the technologies they are planning to invest in to mitigate today's fraud threats and scale to address emerging fraud patterns.

Key Findings

For FIs in Malaysia, digital banking and cashless services have gone mainstream and are pegged to overtake the average APAC rate of adoption this year in particularly e-banking, e-statements, and e-wallet services. The indicators reflecting Malaysia’s growing digital lifestyle preference can be seen from their relatively high smartphone penetration at 78%, and the readiness in its internet infrastructure from the 80% penetration rate of their 4G networks¹.

Source: Future-proofing Fraud Prevention in Digital Channels: Malaysia FI Study, GBG and The Asian Banker, June 2020

The ability for Malaysian FIs to manage fraud in the entire digital customer journey is, however not yet on par with the progressive pace of digitalisation. Almost half of the respondents indicated that fraud detection during the onboarding phase is a challenge. This gap would be intensified as organisations (more than 25% of Malaysian FIs) plan to ramp up their rollout of instant banking and credit facilities, particularly instant bank account application, instant loans and instant credit card application.  Instant financial services are of huge interest to consumers, providing them immediate gratification in obtaining financial support and merchandise, but fraud detection and prevention for these services are still in its nascent stage and both organisation and consumers could be more vulnerable to unchartered fraud types.

Source: Future-proofing Fraud Prevention in Digital Channels: Malaysia FI Study, GBG and The Asian Banker, June 2020

Fraud shows no signs of ebbing. With the rise of digitally connected devices and continuous streams of Personally Identifiable Information (PII) or personal data being shared online, fraud and cyber financial crimes have likewise increased. In Malaysia, this is exacerbated by the COVID-19 pandemic and Movement Control Order (MCO) where consumers are propelled to rely more heavily on online and cashless transactions to lead to even high volumes in scams and frauds.  

From the research, all fraud typologies from social engineering, first-party fraud, cyber-attacks and AML (anti-money laundering) are projected to increase in 2020-21. In particular, 54% of the FIs in Malaysia are expecting an increase in scams and 51% on stolen IDs. Just in August, it was reported that the Macau scam had incurred the heaviest financial loss at RM49.9 million across 1,001 cases since the implementation of the MCO. The other two highest financial losses arise from non-existent loans at RM18.3 million across 1,582 cases, and ecommerce at RM17 million across 2,500 cases².

Source: ²The Malaysian Reserve, MCO fraud losses over RM100m, Aug 2020

Source: Future-proofing Fraud Prevention in Digital Channels: Malaysia FI Study, GBG and The Asian Banker, June 2020

June Lee, APAC Managing Director of GBG, commented, "Looking at 2020-2021, the COVID-19 pandemic will continue to push people and businesses to take digital-first approaches to financial transactions. Our research indicates that 21% of FIs in Malaysia have started to lay the groundwork in establishing end-to-end fraud management platforms. However, the expected growth in scams would require added layers of data intelligence to assess the digital tools which are used to onboard and transact with the financial organisations, as well as to obtain a better holistic view of the intent and integrity of the individuals.  Being agile in harnessing new fraud prevention technology will enable FIs to get ahead of escalating and fast-growing emerging fraud patterns and secure the digital trust of their customers.”

Other key findings from the report include:

1. End-to-end fraud management platform readiness is a key differentiation to driving digital product preference for 56% of Malaysian FIs. However, vertical silos are still seen in 40% of Malaysia financial institutions.
2. The Unbanked segment would be a mainstream segment focus in 2020-21 with the advancement in fraud technology today.
3. There is a higher than expected interest in utilising geolocation to enhance fraud detection, during digital onboarding as well as in transaction and payments.

Chee Leong Chin, APAC Chief Technology Officer of GBG, added, "The proliferation of PII is making consumers increasingly vulnerable and susceptible to fraud and identity crimes. To combat this, GBG continues to innovate and be ahead of market needs with its tech stack ranging from end to end fraud platforms, to pre-emptive fraud detection like machine learning and data intelligence from best in class players across identity proofing, mobile and IP assessment, cyber threats, credit risk and location intelligence.”

GBG collaborated with The Asian Banker to conduct a survey across 324 respondents from financial institutions (FI) in six Asia Pacific (APAC) countries, Australia, China, Malaysia, Indonesia Thailand, and Vietnam.

For more insights into the research, download our report: “Future-proofing Fraud Prevention for Digital Channels: APAC FI Study”

To access the series of Future-proofing Fraud Prevention in Digital Channels reports, visit:

• Indonesia Financial Institution Study
• Malaysia Financial Institution Study
• Australia Financial Institution Study
• APAC Financial Institution Study

To find out more about how we help our clients establish trust with their customers, visit www.gbgplc.com/apac, follow us on Twitter or LinkedIn.