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    Home » News » Fraud Regulation and AI Agents Put New Pressure on APAC Banks
    AI Digital Transformation Sponsored

    Fraud Regulation and AI Agents Put New Pressure on APAC Banks

    Banks face growing pressure from changing customer behaviour, tighter AI oversight and increasingly sophisticated fraud networks.
    Dattu Kompella, Managing Director, Asia Pacific, FICOBy Dattu Kompella, Managing Director, Asia Pacific, FICO14 October 20263 Mins Read
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    Fraud Regulation and AI Agents Put New Pressure on APAC Banks
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    Retail banking in Asia Pacific is undergoing a structural reset. The forces reshaping the industry are changing how growth is won, how risk is managed, and how customer relationships are built and defended.

    Banks still treating AI primarily as a technology upgrade risk falling behind those redesigning their decisioning architecture around it.

    The economics are becoming difficult to ignore. AI leaders in banking could lift return on tangible equity by up to 4 percentage points.

    But the downside of moving too slowly is not simply missed opportunity. It is the potential erosion of existing profit pools.

    Five converging pressures are defining the next era of banking in Asia Pacific:

    AI could erode up to US$170 billion in global banking profit pools over the next decade

    As agentic AI matures, value traditionally captured within banking relationships could increasingly migrate to new intermediaries, platforms, and business models.

    Banks need to determine where AI creates advantage and where it could disintermediate them.

    Consumers could increasingly delegate financial decisions to AI-driven agents

    The nature of the customer relationship is changing.

    When AI agents begin comparing products, evaluating offers, and influencing or executing financial decisions, banks will need to compete not only for customers’ attention, but also for selection by the intelligent systems acting on their behalf.

    Regulators are tightening scrutiny around AI transparency, explainability, and accountability

    Across APAC, regulators including APRA and ASIC in Australia, MAS in Singapore, OJK in Indonesia, RBI in India, and Bank Negara Malaysia are placing greater emphasis on responsible AI.

    Banks increasingly need to demonstrate that AI-driven decisions can be explained, governed and monitored.

    This elevates AI governance from a compliance requirement to a board-level priority.

    Customer loyalty is collapsing, and the acquisition channel is being disrupted by AI-powered search and generative AI tools

    The front door to banking is being rebuilt. AI-powered search and generative AI tools are changing how customers research, compare and select financial products.

    This places pressure on traditional acquisition funnels and making speed, relevance and personalisation increasingly important.

    Fraud and scam networks have become more organised, technology-enabled and adaptive, challenging defenses that were built for a different era of risk.

    Fraud is increasingly industrialised. Sophisticated scam networks combine automation, social engineering, AI, and coordinated operations to manipulate customers and bypass traditional controls.

    Defenses designed primarily to detect impersonation or anomalous transactions must now contend with attacks in which the legitimate customer is persuaded to authorise the payment themselves.

    The common thread

    These pressures expose a common weakness: fragmented decisioning that cannot adapt as quickly as the shifts in customer behaviors, risks, regulations, and competition.

    Leading banks are moving beyond isolated AI projects toward a connected decisioning architecture across origination, credit risk, fraud, customer management and other critical customer touchpoints.

    This allows data, intelligence, policies and learnings to be reused across the enterprise rather than rebuilt for every use case. The above overview only scratches the surface.

    The latest FICO Executive Brief, Winning in the New Era of AI-Powered Intelligent Banking, examines all five challenges in greater depth and explores the architectural principles banks can use to turn AI investment into sustainable decision advantage.

     

    Featured image: Edited by Fintech News Singapore, based on image by toia via Magnific

    FICO
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    Author

    Dattu Kompella
    Dattu Kompella, Managing Director, Asia Pacific, FICO

    Dattu Kompella is Managing Director for Asia at FICO, driving the company’s expansion across Southeast Asia, India and the wider region. He works closely with clients across banking, insurance, and government to help them make smarter decisions, manage risk, and leverage AI-driven analytics. Since joining FICO in 2005, Dattu has built a team of trusted advisors across Asia, Australia & NZ and played a key role in expanding FICO’s presence. With nearly 30 years of experience in financial technology, Dattu has held leadership roles at Polaris, Cognizant, and Synergy Login, specializing in retail banking, cash management, treasury, and trade finance. He holds a degree in Mechanical Engineering and an MBA in Marketing and Finance from NIT Trichy, India. A passionate tennis fan, Dattu lives in Singapore.

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