The flood of scams that flourished during the COVID-19 pandemic and still proliferates today has increased public anxiety regarding fraud. Rampant fraud is also reshaping individuals’ expectations of organizations’ obligations to protect them – and the concessions they are willing to make to enhance security – according to a new study on consumer fraud from AI and analytics leader SAS.
Based on a survey of 13,500 consumers across 16 countries, Faces of Fraud: Consumer Experiences With Fraud and What It Means for Businesses reveals the magnitude of the global fraud problem:
• The majority of consumers (70%) reported experiencing fraud at least once. Four in ten indicated they had been victims of fraud two or more times.
• Nearly half (47%) said they experienced more fraud in 2022 compared to previous periods.
• Almost nine in ten (86%) admitted to being more cautious about fraud than in the past.
The most common fraud strategies reported by survey respondents were attempts to obtain banking data or personal information. Mobile phones and email emerged as the most used communication channels by fraudsters for initial contact.
“When fraudsters succeed in their attacks, organizations in highly targeted sectors, such as banking, insurance, government, retail, and telecommunications, serve as unwitting conduits for criminal activities,” said Stu Bradley, Senior Vice President of Risk, Fraud, and Compliance at SAS.
“Given that two-thirds of surveyed consumers said they would switch service providers due to fraud or if another provider offered better fraud protections, the potential consequences of inaction are substantial and should not be ignored.
The Balance Between Concessions and Evolving Customer Expectations
Changing consumer attitudes highlight the importance of robust fraud defenses, with 89% of respondents indicating that organizations should do more to protect against fraud. The good news for businesses? Most of their customers are willing to sacrifice a bit of convenience for stronger safeguards:
• Three-quarters said they would accept more delays and checks on transactions for better fraud protection.
• Eight in ten are willing to use biometric methods, such as facial recognition, hand geometry, retinal identification, or voice recognition, for payments and transactions. Additionally, more than half (57%) prefer to use unique identifiers, such as biometrics, for authentication at the time of the transaction instead of remembering fixed passwords.
• Seven in ten expressed willingness to share more personal data (e.g., location, behavior, etc.) with service providers, based on the fact that they use this information to strengthen anti-fraud measures.