New FICO Survey: Fraud Protection is #1 Consideration for Majority of Consumers Selecting a New Financial Service Provider
March 06 2024 - 8:00AM
Business Wire
Financial service providers must adopt a robust
hybrid-banking model to retain customer trust and ensure easy
account openings
FICO (NYSE: FICO):
Highlights:
- 69% of consumers rank good fraud protection in their top three
considerations when choosing a financial service provider.
- 65% of customers still find value in the information and
services available at brick-and-mortar banks.
- Nearly 70% of customers expect to spend less than 30 minutes
opening a checking account; if the identity verification process is
too time consuming, almost a quarter of consumers will abandon the
application.
Leading global analytics software company, FICO, today released
new research showing the need for financial services providers to
provide robust hybrid banking models to meet customers’ evolving
demands. The report surveyed approximately 1,000 Americans on how
they feel financial institutions are managing their digital banking
experiences. The research underscores the fact that banks need to
address customers’ top concerns, such as fraud and identity
protection, while delivering more personalized experiences to
increase consumer trust and create positive user experiences.
More information:
https://www.fico.com/en/latest-thinking/ebook/fraud-identity-and-digital-banking-consumer-survey-2023-usa
Despite a digital-first era, only 28% of respondents state that
finding the information and advice they need is an advantage of
using an app to open a financial account; for websites, that figure
drops to 24%. This compares to 65% who rate access to advice and
information as an advantage of using a branch, suggesting that
face-to-face interactions strengthened by personalized experiences
can lead to better outcomes.
“Financial institutions must work harder to meet customers where
they are – whether in person or through digital and in-app
interactions. By deploying an intelligent, multi-channel
communication approach to support customers, banks can deliver
personalized, timely services while increasing consumer trust,”
said Adam Davies, vice president of product management at
FICO.
When opening a new account, time is of the essence. And while
37% say they are more likely to open a financial account digitally
than they were a year ago, approximately a quarter say they abandon
opening a checking account altogether if identity verification is
too difficult or time-consuming. Another source of frustration
stems from the number of questions asked during the application
process, with 51% saying they are only prepared to answer up to 10
questions.
Fraud Protection and Trust are Paramount Throughout the
Customer Lifecycle
Key findings from the research show that good fraud protection
can be a competitive advantage. A third of respondents (32%) note
that strong fraud protection is the most important consideration
when opening a new account. Having that added security is also why
most respondents (76%) cite why they prefer to open a financial
account in a branch and a further 65% who say they can get the
information or advice they need in person rather than via a website
or app. By building consumer trust and investing in customer
experience, financial services companies are more likely to succeed
longer term.
“Providing a curated and personalized customer experience
whether in digital channels or in branch can not only build trust
but could reduce customer churn and lead to better outcomes that
lower fraud losses,” added Davies.
Additionally, the survey reports that 12.3% of respondents say
their stolen identity has been used to open a financial account,
equating to over 32 million people. As a majority noted, customers
are more worried about banking-related fraud, with fraud resulting
from stolen cards and identity theft leading to application fraud
as the most likely to feature in their top three most concerning
fraud types. Of the 13 countries surveyed, only India (12.6%)
reported a higher rate of application fraud based on an
individual’s stolen identity than the United States. Similar
economies such as Canada (5%) and the UK (4.3%) reported much lower
levels.
Communication For Good Fraud Management
Financial institutions must effectively communicate to manage
different fraud types across the customer lifecycle and address
customer concerns. Delivering personalized and timely
communications addressing all fraud types across different
portfolios and channels enables organizations to put the customer
at the heart of fraud strategies, leading to a positive impact on
customer retention.
“By offering hyper-personalized experiences through FICO
Platform, banks can deliver individual and timely communications
about the banking process directly to customers,” added
Davies.
FICO Leads in Enterprise Fraud
Additionally, Chartis Bank has once again ranked FICO as a
leader in the Enterprise Fraud Solutions 2023 Market Update and
Vendor Landscape. Chartis noted FICO’s range of capabilities and
excellence in analytics ensures that the company helps financial
institutions stay protected from the scourge of fraud even as
criminals develop new and inventive ways to attack.
FICO will showcase its new innovations and use cases for FICO®
Platform at FICO® World, FICO’s premier client event held April
15-18, 2024, in San Diego. For more information on the latest
enhancements to FICO Platform, please visit:
- Fraud, Identity, and Digital Banking Consumer Survey 2023 USA:
https://www.fico.com/en/latest-thinking/ebook/fraud-identity-and-digital-banking-consumer-survey-2023-usa
- FICO Platform: https://www.fico.com/en/fico-platform
- FICO World 2024:
FICO.com/en/events-webinars/fico-world-2024
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 has been made available in over 40 other countries,
improving risk management, credit access and transparency.
Learn more at https://www.fico.com/en.
Join the conversation at https://twitter.com/fico &
https://www.fico.com/blogs/.
For FICO news and media resources, visit
https://www.fico.com/en/newsroom.
FICO is a registered trademark of Fair Isaac Corporation in the
U.S. and other countries.
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Julie Huang press@fico.com
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