New FICO Survey: Consumers Will Switch Banks If Fraud Prevention Expectations Are Not Met

FICO (NYSE: FICO)

Highlights:

• A new global FICO survey finds that more consumers reported that their family and friends have been victims of real-time payment scams in 2024 (56%) versus 2023 (51%).
• 50% of consumers call for their banks to "have better fraud detection systems” as the top action needed to protect them from scams.
• 65% of consumers across the globe say that banks should be required to reimburse scams victims for their losses.

Global analytics software leader, FICO, released new research regarding consumers’ increased use of real-time-payments (RTP), leading to higher reported scams threats and an increase in losses. 2024 marks the second annual Global Scams Impact Survey, showcasing findings and trends from tens of thousands of consumers across the globe, including 1,000 from the United States. The responses, trends, and additional analysis of these datasets are provided in the report.

Overall, consumers around the globe report that with the increase of scams, they have higher expectations for fraud prevention at banks. Banks need to remain competitive in fighting fraud and providing consumers with excellent customer experiences.

"Consumers are asking for banks to do a better job at identifying scams,” said Debbie Cobb, vice president of fraud product management at FICO. "Banks need to prioritize guarding their customers from scams with fraud detection technology that can keep up with the ever-changing landscape, as well as offering educational resources on how consumers can best protect themselves. The survey found that although most consumers globally (59%) say their banks provide enough education on scams, 36% of consumers in the USA and Canada believe their banks do not provide enough.”

Consumers have higher expectations for fraud prevention at banks

The survey shows that more consumers globally in 2024 reported that their family and friends have been victims of RTP scams than in 2023. 56% of consumers (globally) now say their friends or family members have been scammed, versus 51% in 2023 – an alarming 5% increase. Across the world, North American countries reported 47% of family and friends being scammed, Latin America countries reported significantly higher at 69%, European countries reported at 48%, and Asia-Pacific countries reported 56%.

The survey finds that globally, 73% of consumers would feel positive about their banks if they intervened to stop RTP transactions that had been detected and identified as scams, leading to increased customer retention and loyalty. Half of consumers globally (50%) ranked "have better fraud detection systems” as the top action their banks could take to protect them from scams.

Consumers want banks to reimburse scams losses

Consumers will take a series of actions that are costly to banks when they experience scams. Customer churn is one of the most significant risks, as 13% of consumers globally say they could change banks if unhappy with how their bank manages the experience around scams.

Reimbursement liability is another significant consideration, as 65% of consumers globally say that banks should be required to reimburse scams victims for their losses always (34%) or most of the time (31%). In contrast, 47% of Asia-Pacific consumers report lower percentages asking for banks to reimburse for scam losses always (24%) or most of the time (23%).

For banks, transactional monitoring models with built-in scam and fraud scores can help prevent fraud impacts. As consumers continue to embrace RTP, it is essential for banks to give consumers the best experience with the least potential impact from fraud. For more details and insights regarding the survey results:

• Download the Global Scams Impact Survey Whitepaper
• For USA findings specifically, download the 2024 Scams Impact Survey: USA eBook

For more information on FICO fraud solutions, visit https://www.fico.com/en/solutions/fraud-protection-and-compliance.

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 80 countries do everything from protecting four 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.

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