Survey: Consumers Want Better Scam Prevention from Banks

Real-time payments (RTP) continue to grow in both volume and value, with FICO’s 2024 Scams Impact Survey finding that several markets have reached a point of complete saturation. This week is International Fraud Awareness Week, and a good time to review these results.

91% of consumers across the 14 countries in our global survey have now sent RTP. The percentage varies slightly by region, from a high of 98% in Asia-Pacific (APAC), which includes India and Indonesia in our survey, to a low of 87% in North America (NORAM), which includes the US and Canada in our surveyed consumer group.

Not only are global consumers getting more comfortable using RTP – they’re also using RTP more frequently.  Nearly a quarter of consumers (22%) now use RTP more than 10 times per month, up 4% from 2023. And 44% of consumers plan to use RTP more in the next 12 months, versus just 6% who plan to decrease their usage.

Unfortunately, this rapid adoption has also translated to an increase in authorized push payment (APP) fraud, aka scams, across the globe. Fraudsters understand the immediate, irrevocable nature of RTP means they can trick a victim into sending payments – and they’re taking full advantage to steal directly from individuals. Whether criminals are convincing victims to disclose personal information, to reveal financial information, or are using common scams to solicit direct payments, the rate of scam fraud doesn’t show any signs of slowing down.

Consumers Face More Scams

Nearly three-quarters (73%) of consumers globally have received texts, emails, or phone calls they suspected were part of scam, a 5% increase over last year. And 56% of consumers believe their friends or family members have been scammed, also 5% more than in 2023.

More than one in five consumers globally (21%) sent a real-time payment in exchange for goods, services, or investments they did not receive, 2% more than in 2023. This startling statistic varies regionally from a high of 29% in our APAC countries to a low of 13% in Europe-Middle East-Africa (EMEA). Alarmingly, 14% of consumers still sent a payment after receiving a scam warning from their banks!

What Do Consumers Want  from Their Banks to Protect Against Scams?

Consumers around the world want their banks to protect them from scams. 73% of consumers globally say they would feel positive about their bank if it identified that a real-time payment was part of a scam and stopped it. This sentiment is consistent across regions, with 75% in EMEA and APAC, 72% in NORAM, and 71% in Latin America-Caribbean (LAC).

When asked what banks could do to protect them from scams, half of all consumers in our global survey (50%) reported wanting better fraud detection as the number one option.

Communication goes hand-in-hand with fraud detection, and consumers globally rated proactive warnings as the second-most impactful action their bank could take to protect them against scams. Interestingly, more consumers (25%) felt that warnings about known or emerging scams were more helpful than warnings during the payment process (20%). Overall, nearly one-third (30%) of consumers thought their bank could provide more scam education.

A smaller group of consumers would like banks to go further and decline payments they identify as high risk of being associated with a scam. 11% of consumers globally rated this intervention the top action banks could take to protect against scams, while 15% ranked it the second-most impactful action.

How Banks Can Respond to Consumer Expectations

Banks need technology to deliver the experiences consumers expect while protecting them from scams. Traditional third-party fraud strategies aren’t effective for scams, where the legitimate consumer is completing the transaction. This increases the challenge for banks to identify a scam and convince the consumer not to complete the transaction. To achieve that requires two key elements:

1. Use AI- and ML-powered detection models that adapt in real time

Scammers change their tactics in the blink of an eye and continue to evolve. Constant vigilance is required, as is adapting to the scammers’ tactics.  FICO’s patented, real-time ML-powered scam detection model differentiates potential scam transactions from unauthorized transactions that may be the result of third-party or account takeover (ATO) fraud. FICO’s model incorporates patented techniques and sophisticated analytic technologies such as behavior-sorted lists, self-calibrating analytics, and contextual feature generation and profiling to adapt faster than the scammers.

2. Communicate with consumers in the right channel at the right time

Consumers reported that warnings about a potential scam before making a payment are critical, and most consumers will heed warnings from their bank. In fact, our survey found that a majority of consumers did not proceed with a payment after being warned of a potential scam by their bank. FICO has also found that engaging consumers with clear communications that warn of potential or active scams will break the scammers’ spell. Because of this, two-way, real-time interactions with consumers are a crucial aspect of scams protection. The key, from a customer experience perspective, is to communicate in real-time through a preferred channel with a scam-specific script.

Globally, there is not a single alert channel that will work for all consumers. More consumers (33%) prefer to receive scams warnings in their own banks’ mobile apps than any other channel. Another quarter (25%) prefer the privacy of a phone call while 23% remain content with text messaging. 

Protect Consumers or Face the Consequences

The good news is that banks seem to be doing a reasonably good job of balancing customer satisfaction and fraud resolution, with half (50%) of consumers overall reporting they were very satisfied with their bank’s fraud resolution process, ranging from a low of 40% in LAC to 61% in NORAM. However, as scam volume continues to increase, and consumers begin to report losses to their bank more often, banks will face challenges maintaining a high level of satisfaction with the process.

The risk of not being a trusted partner is high. Our survey finds that when consumers are unhappy with their bank’s response to a scam incident, the consequences are costly; globally, 55% of consumers will complain to their bank, while another 21% will complain to regulators and 13% will change banks altogether.

Sensible friction can encourage consumers to stop and think before sending a payment. And while few consumers reported declining a payment as a top action their bank could take, nearly three quarters (73%) reported they would feel positive if their bank stopped a payment associated with a scam. They want their bank to be a partner in the fight against fraud and scams.

How FICO Fights Scam Fraud

• Download the FICO 2024 Global Scams Impact Survey
• Read about our award-winning scam detection model.
• Engage customers in real time to stop scams with FICO’s Customer Communications Services for Fraud.
• Read the reports on our scam survey by country:
  • USA
  • Canada
  • Germany
  • Netherlands
  • South Africa
  • Spain
  • Sweden
  • UK
  • India
  • Indonesia
  • Colombia
  • Mexico
  • Peru
  • Brazil

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