Voice of the Industry

FCC landscape in APAC – a perspective

Friday 8 December 2023 08:58 CET | Editor: Alin Popa | Voice of the industry

Embark on a journey through APAC's financial crime compliance landscape with Sachin Shah from TCS and FCC subject matter enthusiast, India, as he puts the spotlight on India's role in the region and the impact of digital innovation.


The banking and financial services industry (BFSI) is the growth engine for global economic prosperity. It is estimated that it contributes approximately 20-25% of the global gross domestic product (GDP) and hence plays a vital role in global economic growth. Any discussion of this industry sans the Asia Pacific (APAC) region will be incomplete. APAC region, which consists of more than 70 countries and has a share of approximately 60% of the global population, drives the demand for the BFSI sector globally. The consumer base it boasts of cannot be ignored by the global financial institutions (FIs) and that is the reason it significantly dominates the global BFSI industry with a share of approximately 43% of global banking profits.  

With this strategic advantage, the APAC region has its own share of concerns in the context of the Financial Crime (FC) landscape. It is ranked second in the overall global Anti Money Laundering (AML) penalties of the 21st century with a share of 30% in value next to the United States of America. As per one of the Asia Pacific Group (APG) reports there are more than 20 typologies identified in the APAC region related to financial crime activities. This ranges from the traditional typologies of bribery and corruption to underground banking, trade-based money laundering (TBML) to frauds, and new age typologies like cryptocurrencies, cyber-frauds, and usage of new payment methods and systems. 

One of the key differentiators in the APAC region in the financial crime space is the varied nature of threats for countries and the different maturity levels of the regulatory framework. Contextualising this regulatory framework of different maturity levels in the context of varied nature of threats, like human trafficking, weapons of mass proliferation and virtual currency makes the whole financial crime landscape of the APAC region complicated, interesting, and of heightened concern. The fact that all three countries on the ‘Black List’ published by the Financial Action Task Force (FATF), i.e., the Democratic People’s Republic of Korea, Iran, and Myanmar are from the APAC region evidences this concern. 

Demographics and digitisation – transforming the landscape 

The APAC landscape, in terms of both economic and financial crime, is changing at an astonishing pace. With rapid urbanisation and industrialisation coupled with technological innovation, the region is growing at a pace of 4.6% and is estimated to contribute 70% of the global growth in 2023. On analysing these demographic changes with the digitisation in the APAC, one can very well understand why the APAC region is becoming a powerhouse for the global banking industry. As per the information available in the public domain, the APAC region has been most receptive to ‘Digitisation.’ The fact that the APAC region is leading the growth of non-cash transactions, globally, at an estimated rate of 19.8% evidences this digitisation. Consequently, the whole banking and payment industry landscape has changed in the region and specifically in countries like India.

APAC region and how India is leading the show

In this journey of digital shift in the APAC region, India has not only taken the lead but also caught the attention of global stakeholders. When many countries deliberate and struggle to have a universal identity document for their citizens, India not only pioneered the approach but also set up a benchmark for the global community in terms of its coverage and benefits. The Aadhaar a.k.a. UIDAI Number (Unique Identification Authority of India number) project, undertaken by India, is described as the most sophisticated ID program in the world to date by World Bank Chief Economist – Paul Romer. The Aadhaar is a 12-digit unique identity number that can be obtained voluntarily by the Indian citizens which is based on the biometric and demographic details of the person. As of date, Aadhaar coverage stands at nearly 100 percent coverage amongst adults. The Aadhaar initiative transformed the whole banking and payments industry in India. The most important contribution of Aadhaar in India’s financial services industry is to lay the foundation of Unified Payments Interface (UPI) which is an instant payment system. This interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions and is used on mobile devices for instant fund transfers between two accounts. Since its launch in 2016, UPI now boasts 10 billion transactions worth USD 180 billion. The UPI payment services have set such a perfect global benchmark that countries like Singapore, United Arab Emirates (UAE), Nepal, Bhutan, France, and Sri Lanka have also entered into an agreement with India to start accepting UPI payments. Apart from triggering digital transactions, the Aadhaar also made customer interaction with financial institutions (FIs) more convenient and quicker. One can now open a bank account within a few minutes, get their demographic details changed in the bank records instantly, and at the same time make the KYC verification process speedier and cheaper for the banks. The business synergies and process efficiencies, in India, which resulted from this digital transformation are a perfect case-study for the banking industry at a global level. 

Financial crime landscape in India - the flip side to the coin and the regulations

As the digital shift put India amidst the global limelight, it also came with its own challenges in terms of rising financial crime activities in the Indian context. India is no different in the APAC region, in terms of various typologies used for undertaking financial crime activities. In fact, the changing business landscape and increased adoption of technology and digitisation resulted in a paradigm shift from traditional typologies of financial crime to the new age typologies like cyber-crime, phishing, sim-swap, synthetic identity theft, payment gateway hacks, cryptocurrency related Ponzi schemes, biometric hacks, and digital frauds like QR scan frauds etc.

Let us have a look at some interesting statistics to understand this paradigm shift. It will be interesting to note that the banking fraud cases (advances, forex transactions, card/internet, deposits, cash, cheques/Demand Drafts etc.) increased by almost 50% in the last 5 years from 6,800 cases in FY2019 to 13,530 in FY 2023. The only point of solace is that the value of these bank fraud cases is showing a declining pattern. Additionally, as per the recent report published by IIT-Kanpur-incubated startup, Future Crime Research Foundation (FCRF), online financial frauds constitute the major share of the digital threat landscape with a share of 77.41% and among all types of frauds, UPI frauds are the most prevalent frauds in India with a share of 47.25% followed by online and social media related frauds accounting for 12.02% of the overall cyber-frauds consisting of cheating by impersonation, cyber bullying/stalking/sexting, fake profiles, identify theft among the other online and social media frauds. 

An interesting point to be noted is the insulation of India from the cryptocurrency-related frauds. Unlike other countries in the APAC region where cryptocurrency frauds have become a regulatory nightmare, India has only 0.16% of cryptocurrency frauds of the overall cyber-related frauds. The reason for this can be attributed to the conservative stand taken by India. 

The Reserve Bank of India (RBI) which is the apex regulator and responsible for having an appropriate risk-based regulatory framework is very much aware of these facts. For the readers, it would be interesting to know that RBI keeps a close watch on the trends and makes the required regulatory changes from time to time to fight the menace of financial crime and frauds in India. The way India has taken a lead role in the digital push, it would not have been possible without the farsighted approach of the RBI and the required regulatory regime crafted with much care and thought process. RBI is supposed to be one of the best and the most respected regulators not only in the APAC region but also across the globe. Consequently, India is known to take the lead in terms of having a risk-based regulatory regime which is very mature and considered as a benchmark for many regulators in other countries globally.  This regulatory regime fosters some of the best practices to be followed by the institutions in India in terms of having comprehensive guidelines on customer onboarding, KYC and AML, payment service providers, cyber frauds, information technology, threat assessment guidelines and comprehensive regulatory reporting requirements. With the new digital age, RBI is also progressive and promotes innovation by providing a sandbox environment to the FIs who want to test the new innovative technologies. This friendly regulatory approach coupled with a robust regulatory framework makes India not only one of the best business destinations for global financial institutions but also positions it as a country with a robust regulatory framework for financial crime and fraud prevention.  


The financial crime landscape in the APAC region, including India, is very complex and mirrors the global financial crime and fraud typologies in an apt way. It is a perfect platform to understand and research the latest typologies of the financial crime activities and study the impact of digital shifts in the banking and financial services industry. A country like India evidences the strategic importance of the APAC region at a global level and demonstrates the presence of an effective regulatory framework to combat the menace of financial crime and fraud. It also highlights some of the global benchmarks set for the global stakeholders like Aadhaar and UPI and gives a clear message to the world that if there is a well-defined intent and regulatory regime, the changing business landscape and incremental digitisation can be tackled easily and quickly. To summarise, countries like India have a strategic place in the APAC region’s financial crime threat landscape and play an important role in making the whole ecosystem more compliant, convenient, and safer, thus metamorphosing the proverb – ‘Where there is a will, there is a way’.

About Sachin Shah, CAMS

Financial Crime Compliance Subject Matter Enthusiast

Sachin Shah is a financial crime compliance subject matter enthusiast, having more than 23 years of experience working with some of the world’s top financial institutions. He has held senior positions assisting financial institutions in mitigating financial crime compliance risk. 

Sachin is a passionate writer and has more than 15 global publications to his credit. 

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Keywords: financial crime, AML, cybersecurity, crypto, FATF, digitalisation
Categories: Fraud & Financial Crime
Countries: Asia
This article is part of category

Fraud & Financial Crime