A new study of 1,000 UK consumers by FICO has put the spotlight on the customer acquisition and retention advantages of strong fraud strategies. Once simply viewed as necessary overhead, according to the new research fraud departments are now the secret weapon in winning customers. Fraud protection was cited as the highest priority for individuals when choosing a provider for a new financial account. However, enhanced fraud prevention processes cannot come at any cost. One in five said they would abandon opening an account if ID checks take too long.
The report found that 34% rank good fraud protection as their top consideration when opening a new account; 73% had it in their top three. The type of fraud that worried Brits most is the threat of a fraudster using their identity to open an account, followed by their card being stolen and used. 18% will abandon opening a current account if identity checks are too difficult or time-consuming. Biometrics are a favourite security choice, with 68% preferring to use fingerprints.
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Potential customers will abandon an application if the checks take too long
James Roche, a fraud consultant at FICO, said: “Financial institutions should use fraud protection as a competitive advantage. Customers are looking for providers they can trust, so institutions should shout about the excellent fraud protection they provide. But when it comes to application and onboarding, they must be sure those protections, fraud checks and identity proofing are appropriate, proportionate and time-efficient to reduce the chance of dropouts.”
Whilst 34% said they are more likely to open a financial account digitally than they were a year ago, the expectation for a frictionless experience has also increased. Consumers expect the application process to be fast. Almost one in five will abandon an application if the checks are too difficult or take too long. Two-thirds expect to spend less than 30 minutes opening a current account.
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