Fraud events make consumers afraid, and FIs see costly customer attrition as a result.
With 1,367 confirmed data breaches in 2013, organized fraud rings innovating constantly, and consumers losing confidence in financial institutions, the security of the financial services value chain has become a divisive subject.
In a landscape rife with risky consumer behavior and unknown unknowns, what’s a consumer to do? How can financial institutions educate consumers about the risks at hand? And is education enough to dodge the dreaded back of wallet?
Percentage of respondents who use their card less as a result of a breach
The ACI/Aite poll found that UAE has the highest rate of fraud overall at 44%, followed by China at 42% and India and the United States at 41% each.
The increasing incidence of card fraud appears to be having a destabilising effect on consumer trust in financial organisations, with one-quarter of cardholders switching banks due to dissatisfaction after experiencing fraud. A further 63% of victims also reported that they are more likely to use their cards less.
Shirley Inscoe, senior analyst, Aite Group. “Consumers lack confidence in their bank’s ability to protect them from fraud, so banks must remain vigilant in their fraud migration efforts or face increased customer attrition.”
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