Fewer than one in ten U.S. banking customers who experience an actual or suspected fraud in relation to their bank account react by moving their business to another bank, signaling widespread inertia among U.S. consumers and a reluctance to change banks, even in the face of fraudulent activity.
The survey of over 1,000 U.S. adults was undertaken on behalf of Detica NetReveal® by Ipsos to gain a comprehensive understanding of the fraud landscape within US retail banking and to gauge customer reactions to fraud and its prevention. The research revealed that, despite the fact that 48 percent of U.S. banking customers were concerned at the risk of fraud and that 14 percent had experienced actual or suspected fraud in the last two years, only 7 percent of them moved their bank account as a result. Over 60 percent of all customers believed that the lion’s share of responsibility for dealing with fraud lies with banks and only 6 percent felt it rests mainly with customers.
In the United States, the financial burden of banking fraud falls almost exclusively on the banks, who provide fraud protection as a standard feature in most products. The research also revealed the general opinion that customers seem quite happy with this arrangement. Interestingly, almost a third (28 percent) of banking customers would be prepared to allow their banks to share information about their financial affairs if it made them safer, but 34 percent did not agree that banks should make greater efforts to prevent fraud even if it meant raising charges for all customers. The majority of respondents did want to be better informed about fraud prevention measures, with 65 percent wanting to know more about what their bank was doing to fight fraud.
Richard Colven, Detica NetReveal® U.S. Country Manager, commented on the findings: “Given that the financial burden of fraud falls on the banks, it is not surprising that customers end up not switching. Ironically, US customers can be irritated when a bank is too aggressive in fighting fraud, such as when a credit card is cancelled and reissued on the suspicion of fraud. So banks in effect face a double whammy – they own the costs and must avoid false positive situations that can irritate good customers. It is good to see U.S. consumers starting to be open to sharing information to fight fraud as this can significantly help the banks to protect honest customers and to prevent financial crime.”
Wesley Wilhelm, Senior Analyst, Aite Group said: “The significant percentage of consumers supporting the fight against fraud is indeed encouraging. There is a long and successful history of collaborative consortia-based fraud initiatives, and the ability to leverage analytics across multiple banks represents a huge opportunity. The same cross-banking approach can also be applied across numerous industries to help ensure every reduction in fraud an institution experiences also reduces the negative impact on their customers - who are also victims.”
Detica NetReveal® is a unique enterprise fraud risk management solution used by major financial services organizations in the US and globally to manage fraud risk by uncovering networks of suspicious behavior, finding the hidden relationships between people and data which cannot be found using conventional detection systems.
About the research
Detica NetReveal® commissioned Ipsos to survey a representative sample of 1,015 adult U.S. residents aged between 18 and 64 years old. Participants were asked to rate their concerns on a number of fraud-related retail banking issues, including personal fraud risk, previous fraud experience and perceived preventative measures. Interviews were conducted online during April 2010.
A full copy of the research is available upon request.
About Detica NetReveal®
Detica NetReveal® (deticanetreveal.com) is a revolution in fraud detection. By uncovering the hidden relationships between people and data, Detica NetReveal® can detect both simple opportunistic and large-scale organized fraud currently hidden within an organization’s systems. In addition, by running high-speed checks at the point of application, Detica NetReveal® can help companies to stop fraudsters before they become customers.
Ipsos (ipsos.com) is one of the leading research companies in the world. Headquartered in Paris, it has offices in 64 countries and conducts research in more than 100 countries. Founded in 1975, it is still managed and controlled by research professionals. Thanks to a sound acquisition strategy, they have built a solid group around a unique multi-specialist positioning – Advertising and Marketing research, Customer and Employee Relationship Management, Media Measurement, Content and Technology research, Polling, Social research and Corporate Reputation Research. The company has been publicly traded since 1999.
Detica (detica.com) specialises in collecting, managing and exploiting information to reveal actionable intelligence. We use this capability to help government and commercial clients reveal intelligence, maintain security and strengthen resilience in today's complex operating environment. We also use our skills to assist clients with other information-intensive problems such as achieving regulatory compliance and understanding customer behaviour. Detica is a BAE Systems company
Detica, Detica Consulting LLC and Detica Limited product names are registered trademarks or trademarks of Detica Limited in the UK and in other countries. Other brand and product names are registered trademarks or trademarks of their respective companies. Detica Limited is registered in England under number 1337451 and has its registered office at Surrey Research Park, Guildford, England, GU2 7YP.
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