More Digital Adoption, Less Trust

According to the Digital Trust Index, authored by Experian, the fraud in Asia Pacific is highly evident and that one in five people have encountered fraud directly, while one in three people or their loved ones have been affected. This brings a negative effect on consumer trust, which the study anticipates will only increase as the adoption of digital services rise.

Covering ten markets across APAC, the report surveyed 3,200 consumers and over 80 organisations from the financial services, telecommunications (telcos) and retail sectors (service providers), each with revenues of at least US$10 million. Countries surveyed include Australia, China, Hong Kong, India, Indonesia, Japan, New Zealand, Singapore, Thailand and Vietnam.

The index reviews a selection of criteria across industries and countries to determine the level of trust that consumers have for digital services. So far, it shows that there is a higher score for consumers who are satisfied with their digital transaction experience, while a lower score indicated a failure in trust.

The Digital Trust Index is based on four key variables including the levels of digital adoption, industry preferences and fraud rates, as well as the effectiveness of the companies’ fraud management capabilities.

Apart from that, the study also found that on an average, trust in digital services is relatively low across the region, which on a whole only scored 3.2 out of 10.0, with telcos having the lowest score of 2.1 and financial services having the highest of 4.9.

Interestingly, while the companies surveyed indicated they are confident in their ability to combat fraud and provide a superior customer experience when fraud does occur, this did not translate to consumer perceptions.

Countries like Singapore and Hong Kong, which would be expected to have a high trust score due to their advanced fraud management systems, lag due to a low tolerance for fraud and perceptions that companies are not managing the post-fraud experience well.

This low tolerance to fraud is mirrored in many advanced economies, while there is a greater acceptance of it in countries where fraud incidents are the most prevalent. Retail, particularly eCommerce, tend to do better in this aspect, due to their focus on the post-fraud customer experience and their ability to quickly address issues arising from fraud.

“As governments across the region lay down plans to increase digitisation and enhance their economic outlooks through adopting new digital services, it is imperative that organisations invest to ensure trust in their digital offerings,” states Ben Elliott, CEO, Experian Asia Pacific.

In order to help improve customer trust in digital services, the Digital Trust Index identifies three key gaps that service providers must address to strengthen trust between themselves and their customers.

The rise in digital transactions

For businesses, getting to grips with the increase in scale requires leveraging smart investments in infrastructure to process these transactions, while ensuring optimal standards of security, availability and reliability of their digital services. This infrastructure includes tools to manage expanding volumes. Therefore, companies and enterprises must utilise automation to combat the expected increase in fraud that comes with rising digital transactions.

Race for convenience

It is critical that service providers in APAC improve their ability to deploy seamless fraud management and detection, supported by customer behaviour analytics in the background to identify fraud in a non-disruptive way. Striking the balance between keeping customers safe from fraud while minimising the friction of online transactions will be of great importance as digitalisation accelerates across the region.

Constantly evolving fraud

The variety of fraud that service providers grapple with is hard to keep track of, much less respond to effectively. With new types of fraud emerging and evolving at a rapid pace, service providers in APAC must look towards future-proofing their fraud detection capabilities to handle fraud types they have yet to even see.

This requires breaking down data silos within organisations and also better utilising analytics. With the growth of data and the variety of channels or touch points, data silos make it difficult for organisations to gain a single view of the ecosystem and their customers.

Breaking down data silos and utilising analytics will enable service providers to better understand their customer behaviours while also improving customer verification accuracy and speed — leading to improved fraud detection and enhanced consumer trust.

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