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FICO Survey: UK Consumers Could Thwart Strong Customer Authentication

January 31, 2019

FICO Survey: UK Consumers Could Thwart Strong Customer Authentication

New fraud rules under PSD2 demand extra fraud checks, but customers not ready to hand over phone numbers

Fraud & Security January 31, 2019

LONDON — January 31, 2019 —

Highlights:

  • Only half (53%) of UK customers would give their bank their mobile number to comply with new fraud rules, FICO survey finds
  • Strong Customer Authentication rules under PSD2 take effect September 2019
  • FICO surveyed 500 UK consumers

Lenders, card issuers and payment service providers that need to comply with new fraud rules under PSD2 next year face a challenge from their own customers. In a new FICO survey, only about half of UK consumers say they are willing to give their bank or card issuer their mobile number in order to carry out extra authentication steps. Many banks are counting on authentication using mobile phones to comply with the rules.

One in five respondents say they will refuse to give their mobile number, while one in four say they will complain if asked, either to the bank, on social media or to a consumer association or newspaper. While 53 percent of respondents will provide their mobile number, the percentage dropped to 47 for consumers aged 18-24.

More information: https://www.fico.com/blogs/fraud-security/strong-customer-authentication-survey

Part of PSD2, which took effect this year, is increasing the security of financial transactions, in part through Strong Customer Authentication (SCA). SCA involves using two forms of verification based on three categories: knowledge (something only the user knows, like a password), ownership (something only the user has, like their mobile device) and inherence (something the user is, or biometrics). The European Banking Authority has stated which transactions will need SCA when the new rules take effect in September 2019. The survey also found that there was no consensus on the best way to deliver a one-time passcode:

  • Sent to my registered mobile phone by text message (SMS): 39%
  • Sent to my e-mail: 17%
  • Sent into my secure mobile banking application: 14%
  • Create it with a special gadget that my bank gives me, such as a PIN sentry device: 10%
  • A call to my registered mobile phone number where it is spoken to me: 8%
  • A call to my registered home landline where it is spoken to me: 7%
  • Don't know: 5%

“Millions of customers have already left brands that failed to provide hassle-free, frictionless digital services,” said Russell Robinson, vice president of solution sales management at FICO in Europe. “Banks rolling out SCA next year need to make it easy for customers, and not try to force customers onto a particular communications channel to verify a transaction. Banks that get it right will build on customer loyalty; banks that get it wrong will see their customers flock to other brands and payment types.” Research Now Group Inc surveyed 500 consumers each in the UK, Germany, Spain and Sweden.

About FICO
FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956 and based in Silicon Valley, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 190 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 100 countries do everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of airplanes and rental cars are in the right place at the right time.

Learn more at https://www.fico.com

FICO is a registered trademark of Fair Isaac Corporation in the U.S. and other countries.

Media Contact:
Emily Broadbent for FICO
Catalysis
+44 (0)20 7759 2017
fico@catalysis.co.uk

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