Almost three-quarters of Asia Pacific organisations have been victims of financial crime in the past year, according to recently published survey results by Refinitiv.
Refinitiv has published a report providing details of its survey of international businesses on how data and technology is being used to fight financial crime.
The report said firms had a “lax approach” to due diligence checks when onboarding new customers, suppliers and partners “creating an environment in which criminal activity can thrive.”
Refinitiv surveyed 3000 compliance managers across 24 jurisdictions globally including Australia (129), China (130), Hong Kong (118), India (130) and Singapore (130) in Asia Pacific.
The report finds that 60% of Asia Pacific firms are adopting new technologies to combat financial crime, spending an average of 47% (compared to 51% globally) more to mitigate risks arising from financial crime.
In a similar report last published last year, Refinitiv had said that USD 1.45 trillion of aggregate turnover was lost as a result of financial crime.
“The increased investment emphasises the priority placed on fighting financial crime in 2019 and reflects the amount of pressure respondents are under to be more innovative to both reduce risk and costs.”
Over eight in 10 (81%) respondents said that there is some sort of existing partnership or taskforce in their country to combat financial crime, including 85% in Asia Pacific. Further, 86% believe that the benefits of sharing information within such a partnership organisation outweighs any possible risks – this was slightly higher in Asia Pacific at 88%.
A significant majority of global respondents (97%) said that technology can help prevent financial crime with cloud-based data and technology being the top choice for firms followed by AI (artificial intelligence) and machine learning tools.
Close to three quarters of respondents in APAC, according to Refinitiv, are “struggling” to adopt technological advancements – over half of the respondents in China and 84% of the respondents in India facing this difficulty.
Other key findings for Asia Pacific:
- 75% of large organisations in Asia Pacific have been victims of financial crime over the past 12 months, compared to 72% globally. This was highest in India at 89%.
- 44% of Asia Pacific companies have experienced cases of financial crime by their own employees.
- An average of 4% of global turnover is spent on customer and third-party due diligence checks, rising to 5% in Australia and India in Asia Pacific.
- 52%: the percentage of external relationships that did not have an initial formal due diligence check at the onboarding stage. This rises to 62% in Hong Kong.
- 72% across Asia Pacific are struggling to harness technological advancements, including 52% in China and 84% in India.
- Across Asia Pacific just over half (52%) of the data and legal documentation obtained to carry out due diligence is in a digitised format.
- 82% in China (highest across all countries), while only 54% in Australia are prioritizing automation and digitisation for investment.
- 81% globally and 83% in Asia Pacific say data privacy regulations are restricting their ability to collaborate against financial crime.
- 88% in Asia Pacific consider that the benefits outweigh the risks when sharing information and collaborating against financial crime. This is highest in India at 95%.
The report is available here.