JOHANNESBURG–(BUSINESS WIRE)–As more and more payments are made online, new research from global analytics software company FICO suggests South Africans are concerned about scammers using their information to hijack their financial personalities. When asked which fraudulent practices worry them the most, 36 percent were most concerned that scammers could steal their identities and use them to open financial accounts, while 28 percent of South Africans were concerned that scammers would use the information to take over their accounts. 17 percent of those surveyed had already been victims of account fraud.
South Africa has seen a spate of fraud crimes, reports the Global Consumer Pulse Study 37 percent of South African consumers have recently been victims of digital fraud related to Covid-19. TransUnion reported that the percentage of suspected fraudulent digital transaction attempts against companies originating in South Africa has increased 44 percent from March 2019 to March 2021.
“Criminals found new ways to commit crimes as the pandemic began to spread around the world,” he said FICO Vice President and General Manager for MEA, Michelle Beetar. “The changes in human behavior, particularly the shift to more digital methods of managing relationships and finances, have created opportunities for more fraudulent activity.
“One worrying finding is that only 8 percent of respondents said the type of scam they were most concerned about was a scammer tricking them into sending a payment, although this type of scam is rapidly increasing and is a key focus for banks. Consumers should understand that it’s incredibly easy to be fooled by these scams that appear to come from trusted sources like their bank or a courier company.”
Doubts about fraud protection
Almost one in three respondents (31 percent) felt that banks do not have enough security controls in place to protect online payments and that more security controls are needed. When it comes to setting up direct debit orders on individuals’ bank accounts, 21 percent of respondents said there were not enough checks.
Notice from the bank
Most consumers prefer to receive notifications of suspected fraud via SMS, while 34 percent prefer to receive a message in the bank’s app. Only 6 percent prefer phone calls.
The biggest annoyance for consumers is having to go through different authentication methods for banking security. About 14 percent of respondents said it takes forever for messages about a fraud rejection to reach them, and a similar number said it was an affront for banks to block their cards for legitimate purchases.
One of the most negative transaction experiences reported was the refusal of a ticket purchase at the register. Almost half (49 percent) of respondents consider this a negative experience, and half of respondents said the same about refusing online purchases. Almost 39 percent of South Africans said they would switch banks if a card transaction is incorrectly declined up to three times during an online transaction, or switch service providers if the same thing happens in-store.
Growth in real-time payments
South African confidence in real-time payments appears to be increasing; Half of the respondents said they are more likely to use them now than they were a year ago. While convenience is important, the move to digital banking is not without its risks. SABRIC reported that online banking fraud cases increased by a third between 2019 and 2020, while total fraud losses remained virtually unchanged. These statistics show that either many more people are being tricked into sending money from their bank accounts, or that the frequency of compromised digital credentials is increasing in tandem with the adoption of digital channels.
The trend toward digital payment preferences is clear: 79 percent of respondents say they will continue to do all their banking through apps or websites, and just 4 percent say they will do their banking in person.
“Banks urgently need to find the right balance between security controls and consumer education,” concluded Beetar. “To prevent customers from feeling overwhelmed and annoyed by security measures, banks should use their customer communication channels effectively so that they enhance, not detract from, the customer experience. They can also “invisibly” review payment transactions, AI and machine learning tools examining transaction data to identify fraud signals are an accurate way to detect and prevent fraud without impacting the customer experience.”
Respondents came from all 9 South African provinces and ranged in age from 18 to 55 years, with a gender distribution of 49 percent males and 51 percent females. The survey also included consumers in Brazil, Canada, Chile, Colombia, Germany, India, Indonesia, Mexico, South Africa, Thailand and the United States.
FICO (NYSE: FICO) supports decisions that help people and businesses around the world thrive. Founded in 1956, the company is a pioneer in using predictive analytics and data science to improve operational decisions. FICO’s South African offices are headquartered in Illovo, Sandton.
Learn more at http://www.fico.com
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