Two-Thirds of Consumers Will Switch Provider If They Don’t Feel Protected Against Fraud

Nearly two-thirds of UK consumers will switch providers if they don’t feel protected against fraud, according to a new consumer fraud study commissioned by AI and analytics leader, SAS.

The survey of 13,500 global consumers highlighted the importance of robust fraud protection measures, with nearly 90% of consumers believing that organisations should be doing more to protect them from fraud. The findings have been reviewed and analysed in a new report entitled Faces of Fraud: Consumer experiences with fraud and what it means for businesses.

Highlighting the scale of the problem, a third of UK consumers have already been a victim of fraud twice or more, with three-quarters fearful of being the victim of fraud in the future.

Around 87% of consumers are growing increasingly wary of fraud, and when contacted by someone they weren’t expecting to hear from, nearly all will ignore or end the call, try to establish if it’s a legitimate inquiry, or both.

Carlos Sovegni, director of fraud and security intelligence at SAS EMEA & AP, said: 

“With fraudsters becoming increasingly sophisticated, it’s no surprise that three-quarters of consumers are fearful of becoming a victim of fraud – which means financial services organisations need to do more to ensure customers feel protected. The message from our study is that people will switch providers if they feel fraud safeguards aren’t adequate – which no business in the highly-competitive financial services sector can afford.

“Despite fraudsters using email, Whatsapp and social media to contact victims, we also found that 88% of consumers plan to continue – or increase – their use of digital services over the next year.

“Additionally there is now an added threat from fraudsters, in that some may now exploit generative AI tools such as ChatGPT to help them commit fraud. The challenge for financial services providers is to make sure they can combat more sophisticated scams that are aided by generative AI. Another challenge they face is that nearly four in 10 consumers are now less willing to share personal data, even though this data could play a vital role in combating fraud.”

The study also found that a quarter of consumers believe that their financial providers are not clear on the action they are taking to protect them from fraud and other financial crimes, highlighting the importance of transparency when dealing with customers.

When asked about the impact of security checks on customer experience, three in 10 believed that more needed to be done to make the process slicker. Even so, three-quarters said they would agree to more delays and checks in transactions in return for better fraud protection.

Interestingly, 56% prefer to be authenticated at time of transaction using unique identifiers like biometrics rather than remembering fixed passwords.

Carlos added: “The use of facial recognition and fingerprints could solve two challenges at once. It provides an extra layer of security to prevent fraud, while speeding up transactions because consumers don’t have to remember long and complex passwords.

“The research also shows a willingness among consumers to enable providers to use technology in the fight against fraud. Around 7 in 10 are willing to share personal data with service providers on the basis they can use this information to better protect them against fraud.”

To find out more download the report Faces of Fraud: Consumer experiences with fraud and what it means for businesses.