 Reinforcing Australia's financial fortress against scams and fraud with fintechElaine Mei Hua Ho, Thu Huong Dang, Nina Ratnasari, Chan Kachna Kim and Yan Sau Chan Chapter 4 in Research Handbook on FinTech, 2026, pp 70-90 from Edward Elgar Publishing Abstract: The Australian financial services sector is experiencing the escalating phenomenon of scams and fraud, marking a paradigm shift from isolated, low-impact incidents to a pervasive, technologically sophisticated enterprise with far-reaching economic consequences. These illicit activities inflict staggering losses, with Australia reporting approximately $2.74 billion in 2023. This dramatic escalation stems from several factors, notably the unfettered anonymity and global reach of the internet, the exploitation of human vulnerabilities and the rapid technological advancements in digital financial transactions. Scams and fraud encompass a diverse array of deceptive practices designed for financial gain, including investment, phishing, Business Email Compromise (BEC), and pig-butchering, among others. The repercussions of scams are profound for Financial Institutions (FIs), causing financial losses, increased costs and reputational social stability. By employing secondary desk research, this chapter provides comprehensive insights into continuously evolving fraud prevention and mitigation strategies, as well as regulatory environment and legal measures in the Australian context. Preventive strategies outlined in this chapter encompass the establishment of robust risk management frameworks, the implementation of comprehensive monitoring systems and the adoption of multi-layered security measures. This chapter provides nuanced insights and frameworks on the pivotal role of artificial intelligence (AI), blockchain technology, quantum computing, and biometrics in effectively preventing and combating scams within the Australian financial services sector. These technologies are instrumental in enhancing compliance, fraud prevention, and risk management strategies by leveraging real-time data analysis, behavioural analytics, immutable transaction records, enhanced security measures and fraud prediction to proactively detect, prevent and mitigate fraudulent activities. Australia's rigorous regulatory environment, characterised by collaborative efforts among major regulators, attests to the gravity with which these issues are addressed. With the future threats from evolving frauds and scams, it is crucial to establish a collaborative regulatory approach that bridges domestic and international efforts to ensure robust enforcement against cross-border scams. The promotion of advanced regulatory technology (regtech) solutions aids in streamlining compliance and fraud detection. From a societal point of view, there should be a concerted effort to foster digital literacy among vulnerable populations. With emphasis on the urgency of addressing the escalating prevalence of scams and fraud within the Australian financial services sector in this chapter, it calls for a multipronged approach that encompasses robust regulatory frameworks, enhanced technology adoption and concerted efforts to promote financial literacy within businesses. Keywords: Scams and frauds; Fintech; Blockchain; Regulatory environment; Prevention and mitigation; Risk management (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:22791_5 Ordering information: This item can be ordered from Access Statistics for this chapter More chapters in Chapters from Edward Elgar Publishing |
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