Retailers have been fighting fraud for years, but the explosive e-commerce boom has given this age-old threat a new stage to perform on. As the money trail has moved online, fraudsters have inevitably followed suit. According to the Singapore Police Force’s Mid-Year Scams and Cybercrime Brief 2024, e-commerce scams took the top spot, with 7,250 incidents reported in the first half of last year. That's an incredible 27.3% of all scams, far ahead of job scams (5,717, 21.5%) and phishing scams (3,447, 13.0%).
Consumers have certainly taken notice. Ping Identity’s local Singapore findings reveal that security (77%) and privacy/consent (74%) are now as important as ease of use (74%) when it comes to engaging with online brands. This shows a shift in priorities. While speed and simplicity used to be the gold standard, users are now just as concerned about who is handling their data and how it’s being protected.
Staying ahead of these ever-growing customer expectations isn’t easy, but artificial intelligence (AI) could be the way for retailers to deliver.
1. AI is no longer optional for retailers
AI may be a relatively new player in retail, but its influence is already undeniable. Shoppers in Southeast Asia, including Singapore, are showing a remarkable level of confidence in AI-powered platforms, with 92% relying on AI for personalised recommendations and 90% trusting it for product summaries.
However, as retail fraud continues to accelerate, AI’s capabilities extend far beyond improving the customer journey. It can also serve as an important tool for fraud prevention and help to reduce the loss of sales caused by criminal activity.
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Leading e-commerce brands are using AI and machine learning to monitor transactions, detect fraud, and combat counterfeit goods. One of AI's greatest strengths is that it can analyse vast amounts of data to flag unusual patterns that suggest fraudulent activity, often uncovering issues that would otherwise go unnoticed. Retailers who have not yet integrated AI into their fraud prevention strategy should act now before they become the next target.
2. Passwordless is the new standard
Traditional passwords have long been a thorn in the side of digital security and are becoming obsolete. They are often hard to remember, pose a serious security vulnerability, and ultimately lead to frustrated customers and lost sales. In Singapore, Ping Identity found that 95% of consumers have difficulty managing their passwords and 57% of them abandon online services due to login difficulties.
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To avoid becoming another source of customer frustration, brands should move away from outdated password systems and adopt passwordless authentication. For many, this could mean adopting biometric methods such as facial recognition, fingerprints, or selfie verification. Behind the scenes, AI plays a critical role in providing both a seamless and secure experience by verifying identity through the analysis of biometric data, ensuring that the right person is accessing the account and not an imposter. This may be a more straightforward application of AI, but it’s one that consumers will undoubtedly appreciate.
3. Let consumers own their digital identity
Speaking of appreciation, one thing consumers are sure to value is having more control over their personal data. Brands can lead the way in this by adopting a decentralised identity strategy. With this approach, customers no longer have to disclose unnecessary personal details in order to gain access to services. For example, it makes little sense to ask someone to provide their entire National Registration Identity Card (NRIC), which includes sensitive information like their address, race, and citizenship status, just to prove their age. Instead, organisations can issue verifiable digital credentials that are securely stored in a digital wallet. Customers simply present these credentials to businesses, who can verify the data immediately without having to contact the original issuer.
The beauty of digital IDs is that they not only minimise the exposure of sensitive data and reduce opportunities for identity theft—they also empower consumers at a time when security and privacy are top priorities, especially with the rapid development of AI.
A key advantage for Singapore is its early adoption of a national digital ID system through Singpass, which provides seamless access to over 1,400 digital services and handles more than 170 million transactions annually. With retail giants like Shopee and Lazada having already embraced Singpass for identity verification, it’s clear that secure, frictionless authentication is the way forward for e-commerce.
Fraud will evolve but retailers must evolve faster
The fraud problem is not going to slow down for retailers any time soon. The unfortunate truth is that, as with any tool or technology, the impact of AI depends on how it is wielded. With fraudsters already using AI to create convincing fake identities, run sophisticated phishing campaigns, and generate deepfakes that are becoming nearly impossible to detect—while competitors strengthen their defences with AI—the question is no longer if AI should be part of a retailer’s strategy, but how soon they can deploy it.
Jasie Fon is the regional vice president of Asia at Ping Identity
