Combating Illicit Finance in Digital Payment Services: The Role of Data Analytics and Technology in Preventing Payment Fraud and Scams

The proliferation of digital payment systems has transformed financial ecosystems across the ASEAN region, driving efficiency, convenience, and financial inclusion. However, this rapid growth has concurrently exposed systemic vulnerabilities to financial crime, including fraud, money laundering, and cyber-attacks. This study investigates the capacity of financial institutions and regulatory authorities to mitigate these risks, with a focus on the ASEAN context. It highlights the uneven regulatory maturity among member states, the rise in sophisticated fraud techniques, and the challenges posed by fragmented oversight. Drawing on quantitative data and case studies, the research underscores the importance of harmonized regulatory frameworks, technological innovation, consumer education, and regional cooperation. Strategic recommendations are offered to enhance the resilience of digital payment ecosystems and reduce exposure to illicit finance activities.