State of Financial Crime 2023 Report

Thai Banks Prepare for New Central Fraud Registry

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The Thai Bankers’ Association (TBA) is discussing how to accelerate the establishment of a new investigative authority that will monitor deceptive and fraudulent transactions linked to criminals. According to TBA chairman Payong Srivanich, the authority would function as a “central fraud registry” and be separate from the Thailand Banking Sector Computer Emergency Response Team (CERT), which focuses on hacking threats. 

While advanced talks are currently underway, the TBA has yet to set a time frame for establishing the new entity. Payong says a “feasibility study and project details” will dictate the timeline.

The Central Fraud Registry

In 2021, the Office of the National Economic and Social Development Council (NESDC) conducted a study that uncovered nearly half of the people in Thailand had been scammed “through the Internet and modern communication” within one year. With an average damage value of about THB2,400 per person, the study also found more than half of the victims took no action, many believing the government’s online fraud prevention/management was “not as effective as it should be.”  

While Payong noted that TBA members know their clients face a heightened risk of being deceived into making transactions by criminals, “it would be too costly for each bank to implement its own preventive measures.”

The chairman said that setting up the new central registry will require the cooperation of several agencies, including the National Interbank Transaction Management and Exchange. The registry will also fall under the supervision of National ITMX Ltd (NITMX), a digital payment infrastructure system provider under the TBA. 

Online Fraud in Thailand

Thailand’s latest mutual evaluation report (MER) from the Asia/Pacific Group on Money Laundering (APG) was conducted in December 2017. Currently sitting in its fourth round of enhanced follow-ups, Thailand’s MER highlighted risks from a high number of large-scale domestic and transnational frauds, specifically boiler room scams. 

Essentially a type of financial investment fraud, boiler room scams usually involve criminals contacting people by phone or email and convincing them to invest in schemes that are worthless or do not exist. Once the fraudsters have received payment, contact with the victim ceases. Investment scams were also identified as a top fraud concern for organizations worldwide in our State of Financial Crime 2023 report, with 41% of firms selecting the typology ahead of credit/debit card fraud (39%) and identity theft (36%). 

In addition to boiler room scams, the US Embassy and Consulate in Thailand has highlighted “crime email scams” as a common online fraud type. In this situation, a person receives a fraudulent email supposedly sent from the account of an acquaintance or loved one begging for financial assistance because they were victims of some crime or have been unjustly arrested and are in prison. The fraudster usually asks for funds to be wired to them through Western Union, Money Gram, etc.

According to the Ministry of Digital Economy and Society (DES), more than 1,500 people were arrested in Thailand for online fraud and gambling in 2022. Statistics also showed that 58,463 bank accounts were opened illegally for cybercrime purposes, which prompted the closure of eight illegal account trading groups on social networking sites.

Key Takeaways

In light of these statistics, compliance staff should ensure their customer onboarding policies, processes, and procedures reflect the specific money laundering and terrorist finance threats identified in your firm’s enterprise-wide risk assessment.

To combat the rising threats of online fraud, compliance teams should also consider their transaction fraud risk across three core areas of compliance:

  • Process – As new fraud typologies emerge and criminal behavior changes, firms must align their enterprise risk assessments and identify any required changes to their business’ risk appetite.
  • Platform – With an appropriate risk appetite set, and the correct internal alignment, fraud teams can take advantage of machine learning and behavioral analytics for fraud detection. In contrast to a rules-based approach, these solutions can project future risks and help staff respond to changing risks in near real-time.
  • People – Fraud and anti-money laundering teams often work in silos, hindering effective financial crime risk detection. Compliance staff should ensure effective communication channels are in place, especially when evaluating machine learning-based monitoring solutions.

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Originally published January 19, 2023, updated January 20, 2023

Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.

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