• Sergey Putenikhin, VP, Eastern Joint Regional Directorate Managing Director at Compass Plus Technologies


• 11.11.2025 08:30 am
#FraudPrevention #CustomerExperience

Fraud prevention sits at the heart of customer trust in modern banking. Across the Asia-Pacific region, digital payments continue to surge, and with that growth comes a rising tide of scams and unauthorised transactions. In fact, Mastercard estimates that individual consumers in Asia collectively lost nearly $700 billion USD to digital scams in 2024.

Faced with such staggering figures, it’s easy to understand why financial institutions are tightening fraud controls. Yet in their efforts to protect customers, many are discovering an unintended consequence: overly rigid fraud systems that block genuine transactions and frustrate legitimate users.

The false positive challenge

Across much of APAC, banks still rely heavily on rules-based fraud systems. These systems flag activity that appears outside predefined parameters – a transaction from a new device, a purchase in a foreign currency, or spending at an unusual hour.

While rules-based approaches are transparent and auditable, they tend to be blunt instruments. Legitimate customer actions often trigger alerts, resulting in a high rate of false positives - transactions incorrectly marked as fraudulent. For consumers, that can mean being locked out of their accounts or having payments declined for hours. For merchants, it means lost revenue. And for banks, it results in higher operational costs and, more importantly, lost trust.

The hidden cost of caution

Strong fraud prevention is non-negotiable, but when systems become too restrictive, the balance tips. In highly competitive markets where customers expect seamless, instant payment experiences, a single blocked transaction can push them towards a rival that feels “easier to use”.

Operationally, false positives also drain resources. Each flagged case requires manual review, diverting fraud teams away from genuine investigations and increasing back-office workload. What starts as a tool for protection can quickly become a source of inefficiency.

Smarter systems for a smarter era

The future of fraud prevention lies in intelligence, not intensity. By combining the structure of rules-based logic with the learning capability of artificial intelligence (AI), banks can adopt a hybrid fraud management model that delivers both accuracy and agility.

Rules provide the essential guardrails - ensuring consistency, auditability and regulatory alignment. AI adds adaptability - the power to analyse millions of transactions, detect subtle behavioural shifts and learn what “normal” looks like for each individual customer.

Industry reviews suggest that AI-powered fraud management platforms can reduce false positives by 40-60% compared to traditional rule-based methods alone. This means genuine transactions are approved more often, while fraud detection becomes sharper and more precise.

From prevention to trust

For banks and payment providers, the goal is no longer just to stop fraud - it’s to build trust through intelligent protection. Hybrid systems allow institutions to maintain the highest security standards while keeping digital experiences fast, seamless and frustration-free.

As fraud threats evolve and consumer losses reach into the hundreds of billions, the path forward is clear. By investing in intelligent, adaptive fraud management technology, banks can reduce false positives, protect genuine customers, and preserve the trust that underpins every successful financial relationship.

With smarter systems, financial institutions can finally achieve what’s long been seen as a trade-off - protecting customers from fraud without stopping them in their tracks.

To find out more about the advantages of hybrid fraud prevention, check out our latest eBook – ‘From rules to intelligence: How FIs can harness hybrid systems to stay ahead of evolving fraud’