Scams, mule accounts top threats to Apac banks

The Sun

4 days ago

PETALING JAYA: A new industry poll by global analytics software leader Fico has found that scams and mule accounts have become the dominant threats facing banks across the Asia-Pacific (Apac). Seven in 10 (69%) senior banking executives identified these forms of criminal activity as their greatest concern, reflecting the continued rise of scams in which victims are tricked into sending money directly to criminals.
Unlike traditional fraud, which typically involves unauthorised transactions that banks can detect and block, scams often bypass existing defenses because payments are authorised by the victim. Once the money is sent, criminals rely on mule accounts to quickly move funds across institutions and borders, making recovery extremely difficult.
The findings echo a growing alarm across the financial ecosystem, as scam-related losses reach historic highs across the region. In 2024 alone, Singapore reported more than S$1.1 billion (RM3.6 billion) in scam losses, a 70% surge from the previous year. Thailand saw ฿60 billion (RM7.2 billion) in damages, while Malaysia's losses were estimated at a staggering RM54 billion, or nearly 3% of gross domestic product. Similar trends were reported in the Philippines and Indonesia, where scam-related activity now dominates cybercrime reports.
In a statement yesterday, Fico, a company that is a pioneer in the use of predictive analytics and data science to improve operational decisions, said the poll found that more than half of banking leaders (52%) view social media platforms as the top external threat vector for scams, followed by messaging apps (35%).
In a region with more than two billion social media users, platforms such as Facebook, TikTok, and Telegram have become key channels for targeting scam victims and recruiting money mules.
It said that criminal syndicates use these platforms to impersonate officials, promote fake investments, or advertise bogus job opportunities. Many victims are lured into schemes that appear legitimate on the surface, while others are convinced to 'rent out' their accounts in exchange for quick cash, not realising they are enabling financial crimes.
In Thailand, more than 200,000 mule accounts were shut down in a single year. Singapore has introduced legislation that criminalises the supply of mule accounts and gives banks and authorities powers to act in real-time.
The poll also found banks face internal barriers to detecting and responding to scams. The most common issue cited was siloed data (46%), followed by a lack of connected insights across products and channels (28%), and limited real-time integration with third-party systems (13%).
'Scam activity is often fast, fluid, and fragmented,' said Fico managing director of Asia-Pacific Dattu Kompella.
'To respond effectively, banks need connected systems that provide a complete, realtime view of risk. Without breaking down internal silos and unifying insights across teams, many institutions will remain on the back foot.'
The poll also explored bank leaders' views on reimbursing scam victims. Just 14% said banks should fully reimburse customers in all scam cases. Half said compensation should only apply when the bank is at fault, while 36% supported a shared responsibility model between banks and customers.