Billion dollar digital fraud: call for effective cyber governance

Pakistan is emerging as one of the top developing countries losing a significant share of its economy to financial scams, costing nearly 2.5% of its GDP, according to the Global State of Scams Report 2025 by the Global Anti-Scam Alliance and Feedzai. Based on the country's current GDP, this loss amounts to around $9.3 billion - a figure nearly one-third higher than the recent loan Pakistan secured from the IMF. This stark comparison reveals the scale of the silent economic hemorrhage caused by fraud and digital scams draining national wealth.

The report, based on a survey of 46,000 adults across 42 countries, found that seven out of ten adults globally encountered scams last year, and more than one in ten faced such attempts daily. While Pakistan ranked sixth among countries with the lowest average loss per victim - about 139 dollars - the collective effect of these seemingly small losses translates into billions in national damage.

Globally, scams cost the world an estimated $442 billion in the past year alone, with shopping scams, investment schemes and fraudulent offers of unexpected money being the most common. In Pakistan, these scams often exploit SMS, WhatsApp and social media platforms, luring users into fake investment offers that promise unrealistic returns. Many victims receive small initial profits to build trust before suffering heavy losses. Online shopping scams are also rising, with fraudsters posing as courier representatives or bank officials, sending malicious links to steal personal or financial data. Others impersonate relatives in distress or government officers warning of account suspension, prompting individuals to share sensitive details such as PINs, OTPs or passwords.

This alarming surge in digital crime exposes deeper structural weaknesses in Pakistan's cyber governance framework. As the country works to build a progressive digital image through e-commerce, fintech innovation and smart governance, it must recognise that digital progress without digital protection is unsustainable. Cyber governance - the coordinated management of digital systems through effective laws, institutional collaboration and accountability - is no longer optional. It is the foundation of a secure and trustworthy digital economy. Without it, Pakistan's expanding digital landscape risks outpacing the state's ability to manage fraud, protect consumers and maintain economic stability.

Financial institutions must take the lead in fortifying their systems by tightening firewalls, upgrading cybersecurity protocols and deploying intelligent threat detection tools. The transition toward a cashless economy requires that banks and fintech firms establish robust digital defenses to counter increasingly sophisticated scams. However, the extensive collection of personal and biometric data by financial institutions also introduces new vulnerabilities. Without adequate safeguards, this sensitive information could be exploited, posing risks to both individuals and the financial ecosystem. Therefore, strict data governance policies and secure encryption standards are essential to maintaining public confidence in digital banking.

Advanced encryption, multi-factor authentication and real-time transaction monitoring should become standard practices - not optional features. The objective should extend beyond preventing unauthorised access to predicting and preempting potential fraud. Yet technology alone cannot eliminate risk; public awareness remains the strongest line of defence. Many scams succeed simply because individuals unknowingly share private information or fail to verify suspicious messages. There is a pressing need for nationwide digital literacy programmes focusing on cybersecurity hygiene - understanding how to identify fake links, verify authentic communication channels and avoid exposing sensitive personal or financial details.

The establishment of the National Cyber Crime Investigation Authority (NCCIA) brings renewed hope in this fight. As a specialised agency, NCCIA can play a transformative role in tracing financial scam networks, coordinating with banks, telecom operators and law enforcement to ensure that perpetrators face swift accountability. By integrating digital forensics, data intelligence and cross-border cooperation, NCCIA could become the central pillar of Pakistan's emerging cyber governance structure. Beyond enforcement, its mission should also include public education and capacity-building, empowering citizens - particularly young internet users - to navigate the digital world safely and responsibly.

Safeguarding citizens from online scams is not merely an issue of personal security; it is a matter of national economic stability. Scams erode public confidence in digital systems, discourage innovation and undermine Pakistan's vision of becoming a modern, connected nation. While governments often prioritise defending critical infrastructure from cyberattacks, consumer-targeted scams inflict equally devastating blows to digital trust. As technology continues to evolve faster than regulation, Pakistan must shift from a reactive to a preventive stance. Strengthening coordination among financial regulators, telecom authorities and digital service providers is essential to form a unified national strategy capable of outpacing the sophistication of cybercriminals.

Building a sustainable digital future also requires safeguarding the next generation - the children of Generation Alpha - who will grow up in a world where physical and digital realities are inseparable. For them, security will not only mean safe homes or streets but also safe digital spaces where personal data, identity and financial information are inherently protected. Pakistan's efforts toward digital inclusion, e-governance and technological advancement must therefore be matched with investments in cybersecurity education from an early age. Teaching young people about digital ethics, online safety and responsible technology use will be vital for nurturing a resilient, informed and ethically conscious digital society.

As Pakistan strives for a sustainable digital transformation, cyber governance must serve as the backbone of that vision. By reinforcing institutional firewalls, raising public awareness, empowering the NCCIA, and embedding cybersecurity into policy, education and culture, Pakistan can turn vulnerability into resilience. Protecting the economy from scams is not merely about preventing financial loss - it is about preserving national trust, fostering innovation and ensuring that the promise of a digital Pakistan becomes a sustainable and secure reality for generations to come.