When it comes to online business services, fraud has long been a spectre. According to a report released last year by e-commerce payment management company CyberSource, online fraud in Indonesia is more common than in the other Southeast Asian countries. In particular, ride-hailing is a preferred target for fraudsters.
In order to combat this form of cyber crime, Grab announced in Jakarta that it has launched a new fraud detection and prevention system through the Grab Defence suite yesterday. The suite is offered as part of GrabPlatform, the company’s set of APIs for partners to integrate their services with Grab.
“Fraud in the ride-hailing industry is adversarial problem, meaning it’s constantly evolving over time. Fraudsters have impressed us with their ability to game the system, and therefore we have to stay one step ahead of fraudsters. In Grab Defence, all product offerings and the rules also keep adapting with the new patterns to prevent fraudsters from cracking our system,” said Wui Ngiap Foo, Grab’s Head of User Trust, to KrASIA.
Foo said that online fraud has been maturing and spans all levels from petty cases to syndicates. To counter their exploits, Grab has invested heavily on technical advancements and poached security experts from reputable companies around the world. “Our trust and safety team has 120 team members right now, consisting of data scientists and experts. A lot of tools in Grab Defence are built by ourselves, but we’ve done lots of learning and conducting knowledge session with our tech partners like Uber, Didi, Meituan, and others.”
Grab Defence consists of three sets of tools. The Event Risk Management Suite enables businesses to assess the risk of any event or transaction. The Entity Intelligence Services draw from Grab’s database to identify bad actors and assign a risk score to users interacting with the platform. The Device and Network Intelligence services identify fraudsters based on data points gathered from the devices they use.
Indonesia will be the pilot site for this project, with payments platforms Ovo and Kudo partnering up with Grab to use Grab Defence. The suite will be made available to select companies in the country in the second quarter and rolled out further by the end of the year.
“Indonesia is a key market of Grab with a huge user base, wide geographic span, and Indonesia has a very diverse Grab service, which makes it quite vulnerable to fraud. With the launch of Grab Defense in Indonesia, we hope that this can increase trust from community and partners,” said Ridzki Kramadibrata, president of Grab Indonesia, during the press launch.
According to Kramadibrata, criminal syndicates in Indonesia profit by faking GPS data, using modded apps and other methods to syphon driver-partners’ incentives. In the past, Grab has implemented several measures to minimise fraud. In 2017, Grab Indonesia launched Grab Lawan Opik!, a campaign to fight fake orders. The company also instituted Grab FairPlay to encourage driver-partners to report fraudulent behaviour that occurs within the Grab system.
Grab claimed that the campaign had succeeded in reducing fraud by up to 80%, and revealed several large syndicates in various regions in Indonesia. A survey conducted this year by Spire Research and Consulting even suggested that fake orders on Grab have dropped to 5%, which is significantly lower than that of its main rival, Go-Jek, which is estimated to be 30%.
The fraud epidemic has caused millions of dollars in losses for ride-hailing businesses, but Grab is optimistic that its new system will lower the fraud rate further.
“In the industry, we have a joke that to get 0% of fraud, you need to have 0% business. That being said, the risk of fraud is inevitable, but we’re looking for below 1%. Reflecting from the research of independent firm Spire Research and Consulting, I believe that we’ve got the problem under control whereas our competitor has not,” said Foo.
Grab sees billions of transactions every year across different verticals, giving the company an understanding of how fraud takes place in Southeast Asia.
Foo added that any business which processes online transactions can benefit from Grab Defence and that the suite can serve as an add-on for existing anti-fraud systems. “Ultimately, we all have a role to play in reducing fraud in Southeast Asia. Collaboration helps us get there quicker,” Foo concluded.
Editor: Brady Ng
