JOHANNESBURG–(BUSINESS WIRE)–As more and more payments are made online, new research from global analytics software firm FICO suggests that South Africans are concerned that fraudsters will use their information to hijack their financial personas. When asked which fraud practices concerned them the most, 36% were most concerned that fraudsters would steal their identity and use it to open financial accounts, while 28% of South Africans were concerned that fraudsters would use this information to take control of their accounts. In particular, 17% of respondents had already been victims of fraud on their own account.
South Africa has seen a string of fraud crimes, with the Global Consumer Pulse Study indicating that 37 percent of South African consumers have recently been the target of Covid-19 related digital fraud. TransUnion reported that the percentage of suspected attempted fraudulent digital transactions against companies originating from South Africa increased by 44 percent from March 2019 to March 2021.
“Criminals found new ways to commit crimes as the pandemic began to spread around the world,” said Vice President and General Manager of FICO for MEA, Michelle Beetar. “Changes in human behavior, particularly the shift to more digital methods of managing relationships and finances, have created opportunities for more fraudulent activity.
“A worrying finding is that only 8% of respondents said the type of fraud they were most concerned about was a fraudster tricking them into sending a payment, even though this type of scam is growing rapidly and is a major concern for consumers. banks. Consumers should understand that it is incredibly easy to be fooled by these scams, which may appear to come from trusted sources such as their bank or courier service.
Doubts about fraud protection
Almost one in three survey respondents (31%) felt that banks did not have enough security controls to protect online payments and that more security controls were needed. Regarding the establishment of debit orders on the bank accounts of individuals, 21% of respondents said that there were not enough checks.
Communication from the Bank
Most consumers prefer to receive information about suspected fraud via text message, while 34% prefer to receive a message in the bank’s app. Only 6% prefer phone calls.
The biggest irritation for consumers is having to circumvent different bank security authentication methods. Some 14% of respondents said messages about a decline in fraud took forever to reach them, and a similar number said blocking their cards for legitimate purchases was an affront on the part of banks.
One of the most negative transactional experiences reported was when a card purchase was declined at checkout. Almost half (49%) of respondents consider this a negative experience, and half of respondents said the same about the decline in online shopping. Nearly 39% of South Africans said they would consider switching banks if a card transaction was falsely declined up to 3 times during an online transaction, or that they would switch service providers if the same thing was happening in store.
Real-time payment growth
South Africans’ confidence in real-time payments appears to be growing; half of respondents said they were more likely to use them now than a year ago. While convenience is important, the move to digital banking is not without risk. SABRIC reported that between 2019 and 2020, online banking fraud cases increased by a third, while overall fraud-related losses remained virtually static. These statistics indicate that either many more individuals are being driven to send money from their bank accounts, or the incidence of compromised digital credentials is increasing along with the adoption of digital channels.
The trend towards digital payment preferences is clear, with 79% of respondents saying they will continue to do all their banking through apps or websites, and only 4% saying they will do their banking in person.
“There is an urgent need for banks to strike the right balance between security checks and consumer education,” concluded Beetar. “To prevent customers from feeling overwhelmed and annoyed by security measures, banks should use their customer communication channels wisely to improve rather than harm the customer experience. They can also verify “invisibly” payment transactions, artificial intelligence and machine learning tools that examine transaction data to identify signals of fraud are an accurate way to detect and prevent fraud without affecting the customer experience . »
Respondents were sampled from all 9 South African provinces and ranged in age from 18 to 55 with a gender breakdown of 49% male and 51% female. The survey also included consumers in Brazil, Canada, Chile, Colombia, Germany, India, Indonesia, Mexico, South Africa, Thailand and the United States.
FICO (NYSE: FICO) powers the decisions that help people and businesses around the world thrive. Founded in 1956, the company pioneers the use of predictive analytics and data science to improve operational decisions. FICO’s South African offices are headquartered in Illovo, Sandton.
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