FICO UK Research Finds Fraud Protection Is a Bank’s Secret Advantage
February 19 2024 - 4:15AM
Business Wire
Report on Fraud, Identity and Digital Banking
reveals that good fraud strategies are the secret weapon to win and
retain customers – as long as checks don’t take too long
FICO (NYSE: FICO): A new study of 1,000 UK consumers by
global analytics software leader FICO1 has put the spotlight on the
customer acquisition and retention advantages of strong fraud
strategies. Once simply viewed as necessary overhead, according to
the new research fraud departments are now the secret weapon in
winning customers. Fraud protection was cited as the highest
priority for individuals when choosing a provider for a new
financial account. However, enhanced fraud prevention processes
cannot come at any cost. One in five said they would abandon
opening an account if ID checks take too long.
More information:
https://www.fico.com/en/latest-thinking/ebook/fraud-identity-and-digital-banking-consumer-survey-2023-united-kingdom
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
“Financial institutions should use fraud protection as a
competitive advantage,” commented James Roche, a principal fraud
consultant at FICO. “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.”
Whilst 34% said they are more likely to open a financial account
digitally than they were a year ago, 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.
“If one place in the onboarding process sees a high proportion
of dropouts, FIs should consider altering the order in which checks
are made and whether some could happen once the customer has been
accepted,” added Roche.
The new report - Fraud, Identity and Digital Banking -
reveals how the landscape has changed when it comes to identity
verification. Just a few years ago biometrics was an unknown
science for consumers. The 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.
“Aiming for completely frictionless experiences could leave a
financial institution over-exposed to fraud,” concluded
Roche. “Indeed, appropriate friction can actually help
customers feel protected. The reality is, checks must be
proportionate and personal to each customer and interaction.
Therefore, fraud protection needs to be adaptive, using all streams
of customer data for the best outcome for the customer and the
institution.”
FICO® Platform unites core capabilities that aid detection and
resolution across the customer lifecycle, including pre- and
post-book. API access to third-party providers allows users to add
and remove data sources as they see fit, and FICO Platform gives
data science teams what they need to get their models into
production. FICO models reduce false positives so fewer applicants
are subjected to additional fraud checks. Two-way, multi-channel
communications keep customers informed and automate information
gathering to help resolve cases.
1 Research conducted online by an independent research company
adhering to research industry standards. 1,000 UK adults were
surveyed, concluding in November 2023.
Read the full report and find out how FICO can
help banks and other financial institutions implement successful
fraud protection.
About FICO
FICO (NYSE: FICO) powers decisions that help people and
businesses around the world prosper. Founded in 1956, the company
is a pioneer in the use of predictive analytics and data science to
improve operational decisions. FICO holds more than 200 US and
foreign patents on technologies that increase profitability,
customer satisfaction and growth for businesses in financial
services, insurance, telecommunications, health care, retail and
many other industries. Using FICO solutions, businesses in more
than 100 countries do everything from protecting 2.6 billion
payment cards from fraud, to improving financial inclusion, to
increasing supply chain resiliency. The FICO® Score, used by 90% of
top US lenders, is the standard measure of consumer credit risk in
the US and other countries, improving risk management, credit
access and transparency. Learn more at www.fico.com.
FICO is a registered trademark of Fair Isaac Corporation in the
U.S. and other countries.
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For further comment on the FICO UK Credit Card activity
contact: FICO UK PR Team Wendy Harrison/Parm Heer
ficoteam@harrisonsadler.com 0208 977 9132
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