In today’s booming fintech industry, firms focus heavily on user growth and transaction volume. But one risk is often downplayed: fraud. Once it strikes, its impact can outsize the cost of acquiring new customers.
Fraud is not just a short-term nuisance—it’s a ticking time bomb. If ignored, it can jeopardize your finances, reputation, and long-term viability.
How Big Is the Cost of Fraud?
According to the Association of Certified Fraud Examiners (ACFE), organizations may lose on average 5 % of their annual revenue due to fraud. This statistic is cited in their “Report to the Nations” and is often treated as a conservative estimate, because many fraud cases go undetected or unreported.
In Indonesia, the Financial Services Authority (OJK) has recently strengthened anti-fraud regulation by issuing POJK No. 12 of 2024 (Implementation of Anti-Fraud Strategy for Financial Services Institutions).
This regulation mandates that all financial institutions develop and report anti-fraud strategies, making fraud prevention a regulatory requirement as well as a business imperative.
Direct Impact: Cost, Compliance, and Regulatory Risk
Financial losses are the most visible consequence of fraud, but they’re not the only risk. Fraud can also result in:
- Rising operational costs — investigations, audits, remediation, compensation.
- Regulatory penalties — if fraud occurs due to weak controls or non-compliance.
In Indonesia, with the enactment of POJK 12/2024, financial institutions are required to submit anti-fraud strategies and periodic reports to the OJK, and to report significant fraud incidents.
Failure to comply can lead to administrative sanctions, including fines, warnings, or freezing of business operations. Thus, for fintechs, compliance is not optional—it’s part of the operational baseline.
Indirect Impact: Reputation and Trust
In the financial sector, trust is a core asset. A single fraud incident can draw negative media attention and erode customer confidence. As trust falters, the cost of acquiring new customers (customer acquisition cost) rises. Worse, existing customers may switch to competitors. Once trust is lost, rebuilding it demands considerable time and effort.
In markets like fintech where trust and credibility are key differentiators, reputational damage from fraud can inflict long-term business consequences.
Fraud Prevention as a Strategic Investment
Given the risks described, fraud prevention should not be treated as a mere compliance checkbox. It’s a strategic investment that enables fintechs to:
- Mitigate unexpected losses
- Comply with evolving regulation (e.g. POJK 12/2024 in Indonesia)
- Preserve and strengthen customer trust
- Build resilience and operational stability
A robust fraud prevention framework becomes part of the foundation for sustainable growth.
Closing
Fraud may be stealthy, but its impact is real—and sometimes catastrophic. Fintechs that wait until fraud strikes are always trying to catch up. The wiser path is to act proactively: align strategy, compliance, and prevention so your business isn’t blindsided later.
Last modified: September 25, 2025
