Financial Crime World

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Thailand’s Banking Industry Under Scrutiny as Financial Crime Rises

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The COVID-19 pandemic has brought about a surge in financial crimes in Thailand, with nearly one in four companies experiencing fraud, corruption, or other economic/financial crime within the last 24 months. According to PwC’s Global Economic Crime and Fraud Survey 2022 - Thailand Report, this alarming trend is largely due to the increasing sophistication of cybercrime, as well as emerging threats such as Environmental, Social and Governance (ESG) reporting fraud, supply chain fraud, and anti-embargo fraud.

Cybercrime on the Rise

A staggering 24% of Thai respondents experienced an increased cybercrime risk during COVID-19, highlighting the vulnerability of companies’ perimeters to sophisticated attacks. This trend is expected to continue as fraudsters become more complex in their methods and technologies.

Emerging Threats

  • ESG reporting fraud
  • Supply chain fraud
  • Anti-embargo fraud

Supply Chain Risks Loom Large

Less than 10% of Thai respondents are proactively monitoring supply chain risks, leaving them exposed to potential ESG reporting fraud, procurement fraud, and asset misappropriation. The ability to identify fraud/misconduct within the supply chain is relatively low, making this an excellent target for fraud.

Supply Chain Risks

  • ESG reporting fraud
  • Procurement fraud
  • Asset misappropriation

Risk Management Lags Behind

Thailand is falling behind in terms of investment in risk management and compliance compared to global standards. Only 37% of Thai respondents have a designated risk management/compliance function for responding to fraud risks, while less than 30% have increased the size of enterprise risk management/compliance functions.

Risk Management Challenges

  • Lack of investment in risk management
  • Limited availability of skilled professionals
  • Insufficient resources allocated to compliance

Expert Calls for Action

Phansak Sethsathira, Risk Consulting Partner at PwC Thailand, emphasized the need for businesses to focus on investments to better protect themselves from economic crime. “The survey shows that Thai businesses’ perimeters are vulnerable to fraudsters who are adopting new methods and technologies to breach defences undetected. It’s critical that companies in Thailand prioritize risk management and compliance to stay ahead of emerging threats.”

Recommendations for Enhancing Fraud Risk Management

To combat financial crime, experts recommend the following measures:

1. Understand the End-to-End Lifecycle of Customer-Facing Products

  • Identify exploits, preventive strategies, and countermeasures to detect and stop fraudsters.

2. Strike a Balance Between User Experience and Fraud Controls

  • Ensure that users have a great experience while detecting and stopping fraudsters.

3. Orchestrate Data to Track End-to-End Lifecycle of Users and Generate Meaningful Alerts

  • Leverage data analytics to identify potential threats and take proactive measures.

As the financial landscape continues to evolve, it is crucial for Thailand’s banking industry to prioritize risk management and compliance to stay ahead of emerging threats and protect their customers from financial crime.