Can cybercrime reshape vices and even banking in Malaysia?

Malay Mail

2 days ago

AUGUST 14 — Here's an intriguing thought. Is it possible that in an era when financial-digital scams have become so ubiquitous and all-encompassing, one consequence is that many other social problems or vices may decline?
But I'm getting ahead of myself. Let's do a quick rewind.
Everybody knows that online scams and financial frauds are rising faster and faster.
Last week's news in which a doctor lost more than RM8 million was only the latest in what is practically just another day in the land of cyber-fraud.
The losses since 2019 have totalled billions. Eg, the State of Scam Report 2024 revealed that Malaysia lost RM54.02 billion (US$12.8 billion) to scams in 2023, equivalent to three per cent of our GDP.
No two days go by before we read about a doctor or retiree or manager losing six or seven figures in their savings, usually due to some investment scam.
Long and short, scamming has reached pandemic levels of titanic proportions, likely dwarfing most other illegal activity and vice.
Note that throughout the region this problem is huge, too. The United Nations Office on Drugs & Crimes (UNODC) estimates Asian cybercrime syndicates inflicted US$37 billion in losses on East and South-east Asia by 2025.
Ironically the scam phenomenon is also endemic in the sense that it's limited mainly to urban areas where, obviously, the wealthy are located.
Incidentally, for digital frauds and scams, the most vulnerable also happen to be the most successful career-wise, the more educated and the more digitally savvy.
At first this sounds bizarre but it makes sense when you think about it. It's usually folks with these profiles who have the most money and who also spend disproportionately high amounts of time online.
Coupled with increasing urbanisation, rising wealth and more sophisticated technology let's be clear we are a long way off before we see online financial scamming follow the way of illegal DVDs. In fact, such cyber-crimes are going to happen more and more frequently with worse and worse outcomes.
I don't wish to discuss strategies on preventing or avoiding such scams. Instead I want to highlight a few potential (but not immediately apparent) consequences of soaring financial fraud.
The first is how, in some perversely positive sense, other crimes and vices may fall substantially.
Before the era of financial-digital scamming, social vices were in a sort of all-out competition, weren't they? You had gambling competing with prostitution competing with drug peddling and so on. But can these survive the monopolistic onslaught of cyber frauds?
Many tigers fighting on one mountain. But now there's a dragon there. Will the tigers still hold sway?
The losses since 2019 have totalled billions. Eg, the State of Scam Report 2024 revealed that Malaysia lost RM54.02 billion (US$12.8 billion) to scams in 2023, equivalent to three per cent of our GDP. —Picture by Firdaus Latif
Practically for the first time, you now have a situation where fraud syndicates can extract huge amounts of money even against the will of their victims.
One imagines this makes things harder and, yes, as of today many people are more aware of scam calls so scammers need to constantly up their creativity.
Nevertheless, the takings appear to far exceed that from 'traditional' crimes and vices. I don't think we need research to show that 'revenue' from non-scam related vices even come close to RM54 billion!
Hence, when financial-digital frauds have become such a dominant monopoly it wouldn't appear too far-fetched to suggest that before long more and more folks would give up their old vice work and follow the trend.
Cybercrime impacts criminal behavior. In the end it's good 'ol market forces doing their thing.
Example: if I'm a woman from Bangkok who's thinking of coming to KL to work in a dodgy massage parlour, why not just join a scam syndicate and spend my day making cold calls to scam my fellow Thais?
If I'm a Malaysian dude running illegal gambling dens in Subang Mentari, why not instead hire 10 people to sit by 20 phones and pretend to be post-office or jewelry shop clerks?
Just like how the rise of online ordering potentially rips into walk-in dining, it's not hard to see online thievery or pilfering replacing physical practices of a wrong or unhealthy nature.
Another trend, already alluded to above, is the 'war' between scammers and the public. Who can out-think the other? Who can be a few steps ahead?
This is not unlike the war going on between AI deepfakes and counter-deepfake technology. One party strives to produce better fakes, another seeks to produce better fakery-identifying processes. Ad infinitum.
I anticipate more and more seminars and conferences offering instruction and advice on avoiding scams. Hopefully government bodies and even software companies can produce regulations and apps to better detect and resist cyber-fakes, ploys and digital falsities.
Sadly, one of the most effective ways to minimise fraud will be banks throwing more and more checks and guidelines when it comes to transferring funds.
This is going to piss off a lot of people making valid transactions, not to mention the many elderly uncles and aunties who can barely get through a normal bill payment via their bank apps.
Yet, alas, it may be inevitable if only to reduce the amount of funds lost. If more and more kids are being hurt from bicycle accidents, perhaps the primary move to take would be to severely curb the number of bikes on the road. Tough, but necessary.
This brings us to (hopefully?) one of the best scam-proof methods: Offline banking. Back to basics. Who knows, maybe when we're forced to see a bank teller to transfer thousands our anti-scam Defcon levels will be stronger?
Plus, banks could use the in-person moment to double-check suspicious transfers — maybe a quick 'Are you sure this is legit?' or 'Would it be wise to double-check your recipient?' before processing that RM100,000.
Going offline may also force banks to rethink their systems entirely — like, say, mandatory in-person approvals or video-calls for high-value transactions.
Long and short, cyber-crime can potentially reshape the landscape of not only vices, crimes but banking itself. Could it one day impact the very way we think about money?