FICO study highlights importance of strong fraud strategies

A new study of 1,000 UK consumers by FICO has put the spotlight on the customer acquisition and retention advantages of strong fraud strategies.

Key findings

• 34% rank good fraud protection as their top consideration when opening a new account; 73% had it in their top three
• The type of fraud that worried Brits most is the threat of a fraudster using their identity to open an account, followed by their card being stolen and used
• 18% will abandon opening a current account if identity checks are too difficult or time-consuming
• Biometrics are a favourite security choice, with 68% preferring to use fingerprints

James Roche, a principal fraud consultant at FICO commented; “Financial institutions should use fraud protection as a competitive advantage. Customers are looking for providers they can trust, so institutions should shout about the excellent fraud protection they provide. But when it comes to application and onboarding, they must be sure those protections, fraud checks and identity proofing are appropriate, proportionate and time-efficient to reduce the chance of dropouts.”

34% said they are more likely to open a financial account digitally than they were a year ago. However, the expectation for a frictionless experience has also increased.  Consumers expect the application process to be fast. Almost one in five will abandon an application if the checks are too difficult or take too long. Two thirds expect to spend less than 30 minutes opening a current account.

What has changed?

‘Fraud, Identity and Digital Banking’, the new report, reveals how the landscape has changed when it comes to identity verification. Just a few years ago biometrics was an unknown science for consumers. FICO research shows the shift, as 54% believe fingerprint scans provide essential protection; 52% ranked face scans and 49% iris scans.

However, more education is still needed on behavioural biometrics, with just 17% believing these provide excellent protection.

The FICO report also identifies the financial crimes that consumers are most worried about, with identity theft to open a new account the top ranked concern at 30%. Bank account takeover was ranked the crime most feared by 20% of respondents and 16% ranked being tricked into sending money to a fraudster as the top concern.  Giving customers confidence that a financial institution is using the best processes to mitigate against these threats is, therefore, critical.

Image: © Victorburnside via Canva

Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.