Nearly two-thirds of UK consumers will switch providers if they don’t feel protected against fraud, according to a new consumer fraud study from AI and analytics firm SAS.
After surveying 13,500 global consumers, SAS found that almost 90 per cent of respondents believe that organisations should do more to protect them from fraud.
In its latest report, ‘Faces of Fraud: Consumer experiences with fraud and what it means for businesses‘, SAS also reveals that a third of UK consumers have already been a victim of fraud twice or more, with three-quarters fearful of being a future victim of fraud.
Around 87 per cent of consumers are growing increasingly wary of fraud, and when contacted by someone they weren’t expecting to hear from, most will ignore the call, try to establish if the caller is legitimate, or both.
Carlos Sovegni, director of fraud and security intelligence at SAS EMEA AP, commented: “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 per cent of consumers plan to continue, or increase, their use of digital services over the next year.
“Some fraudsters may also 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.”
Financial providers still need to improve processes and transparency
The SAS study also found that a quarter of consumers believe that their financial providers are not clear on the actions 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, 30 per cent believed that providers should 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 per cent prefer authentication at the point of transaction using unique identifiers like biometrics rather than remembering fixed passwords.
Sovegni 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.”