Lack of proactivity from banks and credit card providers leave cards unexpectedly blocked and many vulnerable consumers without cash, finds new research from Aspect Software
28 per cent of UK consumers that have experienced banking fraud in the last year reported the incidences to their providers first, according to new research. And, according to the latest research by Aspect Software, one in five victims only discovered there was an issue when their card was blocked.
The sample of 500 people in a study commissioned by customer engagement technology provider Aspect, were asked about their experiences with their last incidence of fraud in the 12 months to April 2017, and how well it was handled by their bank, building society or credit card provider. Of the sample, two thirds (66 per cent) claimed to have experienced one fraudulent incident in the last year, with 29 per cent reporting two incidences and 5 per cent experiencing three counts of fraud on their transactions.
Most consumers who alerted their provider to the fraudulent activity first raised suspicion over an unusual transaction or activity on their online banking account (26 per cent), with 9 per cent spotting it on their mobile banking app. When providers identified suspicious activity, the most popular methods of alerting the customer was via an automated SMS or other mobile messaging (such as iMessage) in a quarter of instances (24 per cent), an automated phone call (19 per cent), a branch teller (10 per cent) and email or other form of text notification (8 per cent).
Keiron Dalton, a mobile security expert from Aspect, suggests that consumers expect their banks to be completely on top of security and the risk of fraud. Keiron, Global Program Senior Director at Aspect, commented: “Despite more than a quarter of people having to tell their banks that they’ve been victims of suspected fraud, confidence in provider security among consumers is relatively high. 91 per cent of the sample were either satisfied or extremely satisfied that their provider is implementing the necessary levels of security for their online banking accounts. Mobile fares slightly worse with 84 per cent – possibly accounting for its relative youth as a channel in comparison to online platforms.
“The issue is that banks need to be much more proactive and personal about dealing with fraudulent incidents. Automation such as SMS alerting customers to suspicious activity is a great thing, but it needs to be used with customer engagement and customer experience in mind. Personalisation is also key, as is making sure the customer is aware that their provider is immediately dealing with an issue, even before they’re aware of it. Some banks excel at this, others do not. The industry must work towards reducing customer effort, and friction and stress even when it’s a difficult situation such as money being fraudulently taken. Card and account blocking with long lead times to replacements as well as overly-complex security processes to perform transactions all affect the experience and can dent confidence and trust,” he said.
One of the reasons so many of us are aware of suspicious activity on our financial accounts is the large scale use of online banking across age groups as well as the rapid growth of mobile app banking. In March 2017, Azimo reported that two fifths of UK consumers have avoided bank fees thanks to using technology to manage their money. Keiron believes the effect on fraud monitoring has been similar.
Keiron said: “Banks have always been at the forefront of digital transformation, particularly in the UK. In particular, challengers such as mobile or online-only financial providers have been able to use their investment in cloud technology, faster payments and overall agility to offer a way of managing money that is conducive to today’s digital lifestyles, across online and mobile banking. Our research shows that 44 per cent of those aged between 16 and 44 preferred to use mobile banking apps compared to 4 per cent of those aged over 55, of which 58 per cent favoured online via a desktop or laptop computer. With either digital portal, we are getting much better visibility of our money and are much more aware of the risk of fraud.”
*Survey conducted by Censuswide and commissioned by Aspect Software UK. Sample of 500 respondents in the UK 16+ years old, who have experienced at least one incidence of banking fraud in the last 12 months. Research conducted in April 2017.