Online Fraud Disrupts Investment Climate; Companies Must Increase Budgets for Security

Beyond affecting consumers, the proliferation of digital fraud is creating economic consequences for companies and investors in the digital sector. Companies must allocate additional costs to strengthen security systems, monitor user activity, and educate consumers against deception.

“Resources that should be used for business expansion or innovation are instead diverted to fraud prevention and management,” said Yudistira Hendra Permana, lecturer in Economics and Business at UGM Vocational School.

Indonesia ranks second in digital fraud risk according to the Global Fraud Index. “Investors will consider additional costs for security, dispute handling, and potential reputational damage. This could lead them to demand higher returns or lower company valuations,” he explained.

Furthermore, Yudistira noted that digital fraud is part of an increasingly organised global criminal network. Perpetrators exploit bank accounts, payment services, digital platforms, and shell companies to conceal their illegal activities.

“If fraud proceeds are transferred to foreign accounts, converted into cryptocurrency, or laundered through illegal financial networks, this economic value is difficult to recover into the formal system,” he elaborated.

He added that addressing digital fraud requires better digital literacy among the public and international cooperation to dismantle increasingly complex cybercriminal networks.