SECURITY SOLUTIONS
NEW REPORT REVEALS OVER HALF OF CONSUMERS HAVE BEEN A VICTIM OF FINANCIAL CRIME
Feedzai , a RiskOps platform for financial risk management , has released its latest report , The Human Impact of Fraud and Financial Crime on Customer Trust in Banks . The report , based on research of 4,000 consumers in the UK and US , reveals how fraudsters are taking advantage of the widening fraud knowledge gap , outlining the urgent need for banks to educate and protect their customers with technology .
The report reveals that while over half ( 56 %) of respondents have been a victim of a financial scam , many still lack the knowledge to detect and distinguish between the various types of financial crime .
Consequently , many consumers believe the responsibility for reimbursement lies with their bank , with over half ( 53 %) believing they should be reimbursed if they fall victim to a scam or third-party fraud . If they weren ’ t refunded , three-quarters ( 77 %) of respondents across the UK and US indicated they would leave their bank .
Romance tops the list but fraudsters are adapting
Romance scams top the list as the most reported type of scam , with a third ( 36 %) of respondents having either been personally scammed or knowing someone who has been a victim . Arguably one of the cruellest forms of consumer-facing fraud , fraudsters have targeted emotionally vulnerable people , with 13 % of those scammed by fraudsters losing more than US $ 8,400 , causing significant distress .
However , Feedzai ’ s research found that romance scams are just one component of financial crime . Money mules – individuals whose bank accounts are used by fraudsters to transfer money – are becoming an increasingly prominent aspect of cybercriminals ’ economic business models too .
In the US particularly , fraudsters are targeting unwitting consumers to become money mules . Nearly half of US consumers have been approached to receive funds , yet a quarter ( 24 %) are unaware of the risks of being a money mule . In the UK , only a third ( 35 %) of respondents had been approached to receive funds and seem more risk-aware , with only 17 % unaware of the risks associated with being a money mule . Social media is the preferred platform for fraudsters , with 42 % of respondents having been approached on social media to become money mules .
AI drives reassurance but banks need to get it right
As criminals get more aggressive and innovative , emerging technologies such as
ChatGPT create a new set of challenges for banks and financial institutions in tackling financial crime .
In response , banks must act and also embrace innovative technology to protect their customers from fraudsters . AI holds huge potential to keep customers safe while also solidifying customer loyalty , with over half ( 53 %) of respondents feeling safer knowing their bank uses AI to protect them .
However , the need for accuracy when using AI is vital with 46 % of respondents considering leaving their bank if it stopped a legitimate transaction , even if the issue was resolved quickly . The report highlights the critical need for banks to prioritise transparency , effective safeguards and tailored communication strategies to ensure customer loyalty and satisfaction . � www . intelligentfin . tech
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