Click bots are the biggest fraud problem in fintech in SEA, report finds

APAC countries lead the list of top ten ad fraud hit countries.

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Click bots are the biggest fraud problem in fintech in SEA, report finds

Following its Southeast Asia ad fraud report that was published in June, advertizing tech company AppsFlyer recently revealed more details on how app install and ad fraud continue to be prevalent in the region in its  2019 State of Mobile Fraud Report.

Asia Pacific countries lead the list of top ten ad fraud hit countries with Indonesia, India, and the Philippines being the most affected countries globally. Southeast Asia’s losses accounted for 40% of the total estimated ad fraud losses in APAC which totaled USD 650 million in the six month period from November 2018 to April 2019 alone, according to the report.

AppsFlyer’s report stated that ‘click initiated by bots‘, ‘click flooding or spamming‘, and ‘fake installs‘ are the most popular methods of digital ad fraud in Southeast Asia. Meanwhile, “device farms” or physical locations with racks full of devices on which scammers manually perform different actions like clicks, installs, and registrations, to skim off rewards are being seen as a less effective but are still found in the region.

The financial sector is the most exposed to ad fraud due to the high pay-out it offers and its popularity as the third-largest app category. A staggering USD 750 million in finance apps’ ad spend is exposed to app install fraud, with Vietnam, Indonesia, and India ranking among the worst-hit countries, the report says.

According to AppsFlyer’s analysis, the potential for high returns is one of the main reasons why the fraud rate is so high in Southeast Asia. The popularity of the Android operating system in the region also contributes to the high rate because it is considered four times more vulnerable to fraud than Apple’s iOS.

In this report, AppsFlyer analyzed activities from November 2018 to April 2019 by examining 2.5 billion installations consisting of 8,000 apps in the entertainment, finance, gaming, e-commerce, travel and utility segments.