These moves all represent a strong response to a growing regional threat, exemplified by Southeast Asia’s “scam compounds”: physical hubs where criminal syndicates orchestrate large-scale online scams, including identity fraud, phishing, fake investments and money laundering. Disguised as legitimate businesses, these sophisticated operations generate billions of dollars annually.
What’s driving this evolution in financial crime? Increasingly, it’s artificial intelligence. Criminal networks use AI to create synthetic identities, launch massive phishing campaigns, and bypass traditional security systems—and do so with fewer resources and in record time. While scam compounds are concentrated in Asia, the threat of financial fraud is global.
Yet as Asia’s crime syndicates make headlines, the region’s banks are quietly leading a shift in how to prevent fraud. Unlike other banks, which use AI for customers personalization and call center support, Asian banks are instead tapping AI to fight back against cybercriminals through fraud detection, identity verification, and anti-money laundering.
Asia’s greater focus on AI-powered fraud prevention is due to the region’s exposure to financial crime. Asian institutions are in the trenches when it comes to cybercrime, pushing them to rapidly adopt AI-driven strategies.
Asian banks are leading the way in adopting ISO 20022, a new messaging standard that allows financial institutions to use AI to precisely detect anomalies and cut exposure to financial crime.
Regional priorities are shifting as banks adopt AI. Asia-Pacific banks are focusing on fraud prevention and security, while European and U.S. institutions instead use AI to personalize products and customer service.
In contrast, 58% of Asia-Pacific banks are focusing their AI investments on fraud detection and anti-money laundering, well above the global average. Asia-Pacific banks face a high-risk landscape where criminal networks use generative AI for identity fraud, phishing and financial scams. As a result, the region prioritizes cybersecurity, forging a sharper, security-focused AI strategy that views fraud prevention as a key competitive advantage.
Fraud detection can’t be isolated in today’s threat landscape. It must be embedded within financial infrastructure. Whether that’s through cross-industry accords like Australia’s Scam-Safe Accord, or through the blend of service and security seen in AI-powered chatbots that both authenticate users and resolve queries in real time, APAC is demonstrating how integrated systems can turn raw data into actionable defenses, driven by AI and aligned with operational needs.
Asia-Pacific’s experience highlights that financial security hinges on being proactive, not reactive. Faced with massive fraud losses and complex scam networks, Asian institutions have swiftly prioritized AI-driven fraud prevention. U.S. and European peers, on the other hand, treat fraud prevention as one possible AI application among many. That will be a mistake as AI-driven financial crime starts to spread globally.
AI’s role in fraud will grow. Asia-Pacific’s strategy shows the value of acting quickly to counteract it, integrating fraud prevention into financial infrastructure. As global threats escalate, the world should look to Asia, not just as a regional leader, but as a role model for secure, seamless financial transactions.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
