Despite the general assumption that older banking customers are more at risk of falling victim to fraud, GFT‘s latest ‘Banking Disruption Index’ has revealed that almost half (48 per cent) of 25 to 34-year-olds have, or know someone who has, been a victim of financial fraud, with fraudsters taking £570 from people on average.
The latest GFT Banking Disruption Index, a quarterly survey of consumer sentiment towards digital banking, has found that 22 per cent of victims had to wait up to two weeks to get their money back from their bank following fraud.
Despite the significant investment banks make to protect their customers from fraud, the data found that 34 per cent of 25 to 34-year-olds are concerned their bank’s security measures are not fit for purpose.
GFT also highlighted that only 24 per cent of those aged 55 and over have been a victim or know someone who has fallen foul of fraud, although only 14 per cent think their bank’s security measures are not fit for purpose.
Despite these findings, it remains clear that older generations are still susceptible to fraud, as those aged over 55 are losing the most money to fraud when it does happen, with fraudsters attempting to an average of £938 from them in each attack.
Banking customers are also concerned about the security of their banks – particularly following a rise in the number of emerging neobanks entering the market. The survey found that 40 per cent of consumers would trust a traditional bank more than a neobank to retrieve their money if they became a victim of fraud, whilst only eight per cent said they would trust a neobank over a traditional bank.
Banks battle for security
Richard Kalas, client solutions director of retail banking at GFT UK, said: “This data highlights the growing issue of fraud for younger banking customers, who are more willing to adopt new technology and share data.
“As banks continue to champion digital innovation, they must find a balance to ensure their customers feel protected with the least friction or intrusion.”
As banks look to reduce fraud levels, many are adopting new safety measures, such as location tracking to identify when a card is used in an unusual or different location to the customer, and instant spending alerts to notify customers when their card has been used.
However, banking customers are more worried about their privacy as 40 per cent of consumers would like the ability to opt out of participating in these security measures, according to the survey.
Simon Newton, principal security lead at GFT UK, also added: “The boom in digital banking and artificial intelligence can be seen as both a challenge for the banking sector as it catalyses increasing levels of fraud, as well as an opportunity for financial institutions to tackle it.
“Our research clearly demonstrates there is a greater need for education on the risks, as well as scope for increased security measures from banks.
“Applying AI and large data for payment screening is one way that could provide banks and customers with greater levels of identification and protection.”