FICO Survey reveals UK consumers prefer Banks with increased fraud protection

The findings show that people from the UK, when asked to rank their considerations in selecting a financial account provider, the top factor for 30% was good fraud prevention. This came above value for money at 26%.

Greater levels of checks across the financial services sector in 2021 are probably contributing to consumers seeing fraud prevention as important. Some 63% of respondents in the UK reported an increase in identity checks when purchasing online with a card and 52% saw a rise in the number of checks carried out when logging in to their bank accounts.

FICO’s officials stated that historically, there has been a perception that fraud teams are an overhead, a necessity to cut fraud losses. But successful fraud protection can actually increase competitive differentiation. Consumer awareness of scams and the methods used by financial institutions to prevent fraud is rising and with that comes an increased interest in a financial service provider’s fraud credentials.

The popularity of biometrics and other identity verification tools

The other issue which has seen a sea-change in consumer attitudes is the identity verification methods used by providers. A few years ago, biometrics were largely unknown by consumers. Today they’re the preferred authentication methods, as per the report.

When asked about making a payment online with a debit or credit card, 48% of respondents selected fingerprint scans as an excellent way to secure an account. Another biometric data set – face scan – was the top choice to access an account securely for 45% of respondents.

The appetite for receiving one-time passcodes to verify online payments has also shifted as digital engagement through banking apps has increased. FICO’s survey in 2020 found that only 14% wanted to receive notification of a pass-code to their mobile banking app. That percentage has increased to 36% in the 2022 survey.

Balance is key

There is, however, still some negative experience of verification checks that needs to be addressed by financial account providers. Consumers aren’t tolerant if their experience is poor. One in four respondents said they had stopped opening a new personal account as the identity checks were too difficult or time-consuming. Similarly, 20% said they had abandoned opening a savings account as the checks were too long and difficult.

Aiming for a completely frictionless experiences could leave a provider over-exposed, but being adaptive is critical, stated representatives from FICO. Their survey shows that financial institutions need to be flexible in how they check customers’ identities. Each customer and situation are unique and catering for that well requires sophisticated orchestration of how identity is checked.