Story image

New research reveals customer behaviour around fraud risks

By Catherine Knowles, Tue 4 May 2021

The majority of efforts organisations make to educate customers about potential fraud risks are not working, according to new research from Callsign, the fraud protection and authorisation company.

While most respondents said they read fraud warning messages (86%); of those who did claim they had seen warnings, 58% said they had not done anything different as a result.

Furthermore, 13% stated that they do not look at them at all and just closed the window. Of those who read them, 28% said they are unable to recall what they say.

Further, 17% of consumers remember what the messages say but haven't subsequently changed their online behaviour.

While many people simply ignore fraud warnings, the study also found that 94% of consumers still expect proactivity from online companies or services they use when there is a risk of fraud, the researchers state.

In addition, consumers want to be warned about fraud when they are online: this includes when shopping (66%), online banking (64%) or using an online service (60%).

However, only 18% of those surveyed strongly agree when asked if the companies and services they use online do a good job protecting them against fraud.

The research finds that whilst consumers expressed a desire for organisations to keep them safe, trust to do so is low. As such, 76% of respondents said they would like the choice to opt in or out of being sent fraud warning messages if they had the choice.

In addition, of the 94% of respondents who expected online companies and services to be proactive when they are at risk of fraud; 41% wanted organisations to send a warning message and ask additional security questions before they could do anything else, to check that they fully understood the situation.

However, respondents are very specific when it comes to the different scenarios in which they would like to receive those warnings, such as if a website is insecure (52%), making an online payment or money transfer (42%), setting up a new account (38%) and logging onto an app or online (38%).

Callsign chief commercial officer Amir Nooriala says, "At first glance, our research suggests consumers want to make their own decisions around the risks they take, choosing to opt in or out of receiving fraud alerts, even ignoring them when they are delivered.

"However, there is a disconnect between the safety these warnings are supposed to bring and the poor user experience they cause - hence they are perceived as a nuisance."

Richard Shotton, co-author of the Callsign 'Wild, wild web - Preventing online scams' report and author of The Choice Factory, says, "A blanket messaging approach is not an effective way to educate and elicit the right behaviour or response from consumers. Banks and online services must consider the psychology around how and when individuals consume fraud messages.

"Timeliness is key, you must get the alert in front of people at the exact moment they are at risk of fraud. Without this, banks will continue to spend huge amounts of money on fraud prevention messaging that will never have an impact."

Callsign general manager Asia Pacific Namrata Jolly says,  "The research demonstrates that when organisations attempt to protect their customers through education during the user journey, if it's not delivered in a timely manner, people circumvent it to achieve the most frictionless experience.

"This presents an opportunity for organisations who do this well to win the digital trust of their customers.

"Passive behavioural authentication solutions and well-timed, effective messaging must go hand in hand to create the most trusted, secure and frictionless customer journey possible."

Recent stories
More stories