Malaysia's Journey in Combating Financial Fraud - A Case Study on Ecosystem Collaboration and Innovation

Malaysia’s Fraud Landscape & Context

In recent years, Malaysia has witnessed a steady rise in online financial fraud and scams, mirroring global trends. Since 2019, the rapid adoption of real-time payments and fund transfers have made online transactions faster and more convenient for consumers. However, this growth also created new opportunities for fraudsters to exploit gaps in the financial system.

The fraud landscape in Malaysia is largely dominated by Authorised Push Payment (APP) scams, most notably in the form of telecommunications, investment, and e-commerce scams. Account Takeover (ATO) fraud has also emerged as a growing concern, spurred by an uptick in phishing and malware attacks targeting unsuspecting users.

The common tactic observed across APP scams or ATO fraud is the use of real-time transactions to execute the fraud and swiftly move illicit funds through money mules across different financial institutions to evade detection. Both financial institutions and law enforcement agencies have struggled to keep pace with the rapid changes and persistent information asymmetry in this landscape. The former facing challenges with siloed risk mitigation systems that provide limited insight into the origination and target of fast-moving funds, and the latter relying on traditional investigation methods involving sequential and time-consuming manual processes. Combined, these systemic limitations significantly hinder chances for timely intervention or recovery. 

Creating a Centralised Anti-Fraud Platform: The National Fraud Portal (NFP)

In response to these challenges, Bank Negara Malaysia and Payments Network Malaysia (PayNet) embarked on an initiative in April 2023 to build a centralised anti-fraud platform, now known as the National Fraud Portal (NFP). 

Sitting in the centre of the financial ecosystem as a trusted central payment infrastructure, PayNet had ...

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