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  • 26 November 2021 09:38

Almost 90% of Australian Financial Institutions are Replacing Financial Crime Management Solutions Built In-House Within Three Years

IDC InfoBrief, commissioned by GBG, outlines critical parameters to consider when deciding to build, buy, or rent anti-fraud technology solutions

GBG (AIM: GBG), the global experts in digital identity, helping businesses prevent fraud and meet complex compliance requirements, today announced the release of the IDC InfoBrief “Build, Buy or Rent: Evaluating an Effective Strategy to Fight Rising Financial Crime and Fraud in Asia/Pacific”. Financial institutions (FIs) across APAC continue to grapple with financial crime management strategy and investment— to take full ownership and build in-house systems, buy a solution, or utilise managed services from a solution provider. This IDC infoBrief, commissioned by GBG, is designed as a consultative guide to help financial institutions (FIs) perform due diligence in evaluating critical parameters and triangulate to a decision for their next-generation (next-gen) anti-fraud solution.

GBG has recently commissioned IDC to conduct market research on “Next-Gen Financial Crime Management: APAC Finance, Banking, and Ecommerce” with over 800 respondents across eight key markets in APAC including Australia, Singapore, Malaysia, Indonesia, Vietnam, Thailand, Hong Kong, and Philippines. The research finds that more than one in four (26 per cent) FIs in APAC is currently using a self-built origination/application fraud management system. However, the preference for internally built anti-fraud solutions is expected to decline, where only 21 per cent is choosing a build strategy to deploy their next-gen origination fraud system.

More than one in five (22%) Australian banking and financial services institutions and eCommerce providers reported using in-house built origination/application fraud management systems. A further 21% are considering building their own next-gen origination fraud system, representing a decline of just 1% as compared to the rest of APAC, which showed a more significant downward trend. The decline in APAC in preference for self-built solutions is also seen for next-gen transaction fraud systems, end-to-end financial crime management platforms, anti-money laundering (AML)/compliance solutions, Know Your Customer (KYC)/identity verification solutions, machine learning/AI, and orchestration solutions.

88% of Australian FIs are replacing a solution that is self-built within the next three years. About one in five are replacing their solutions every 12 months (22%) or every two years (18%), and almost half (48%) are replacing their in-built solution every three years.

Carol Chris, Regional Manager for Australia and New Zealand, GBG said, “In Australia, the past 18 months has seen record numbers of scams and fraud instances as scammers capitalise on this era of hyperconnectivity, with financial crimes escalating in complexity and sophistication. Building an anti-fraud system requires huge number of resources but the biggest challenge remains to be the upkeep of the system. A good financial crime management system needs to continuously meet regulatory requirements, prevent emerging and increasingly innovative fraud typologies, and deliver a high standard of fraud detection accuracy to avoid penalising legitimate customers.”

Michael Araneta, Associate Vice-President, IDC Financial Insights said, “Financial institutions now operate on rapidly digitalising consumer markets, and they are facing new risks in financial crimes and fraud. Their response must be new, ultimately enabling them to respond fast and effectively to limit adverse impact to both the institution and the customer. To attain this speed and effectiveness, they will need to pool together a set of technology solutions, skills, and intelligence — and all of them from trusted technology partners. The choice to build, buy, or rent these solutions is up to the bank based on its business, but the effort should be more intense than ever, to effectively tackle modern day financial crimes.”

GBG has been recognised as one of top 100 fintech providers in the world by IDC Financial Insights, the Enterprise Fraud Category Leader in the Chartis RiskTech Quadrant® 2021, and the Best Machine Learning/AI Innovation of the Year by Asia Risk Awards this year.

To download the IDC infobrief “Build, Buy or Rent: Evaluating an Effective Strategy to Fight Rising Financial Crime and Fraud in Asia/Pacific”, click here

To find out more about GBG’s end-to end financial crime solution, click here.

About GBG: GBG (AIM: GBG) offers a range of solutions that help organisations quickly validate and verify the identity and location of their customers. Our market-leading technology, data and expertise help our customers improve digital access, deliver a seamless experience and establish trust so that they can transact quickly, safely and securely with their customers online. Headquartered in the UK and with over 1,000 team members across 16 countries, we work with 20,000 customers in over 70 countries. Some of the world’s best-known businesses rely on GBG to provide digital services and keep the economy moving, from US e-commerce giants to Asia's biggest banks and European household brands. To find out more about how we help our clients establish trust with their customers, visit www.gbgplc.com/apac, follow us on Twitter @gbgplc or LinkedIn.

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