DEBUNKING BANKING FRAUD: 40% OF CONSUMERS SAY THEY HAVE ‘NO IDEA’ WHAT SECURITY THEIR BANK HAS IN PLACE

Consumers claim to have little information on the security their bank has in place, as research reveals around 5 million UK consumers have experienced bank fraud in their lives.

A report published today by independent research agency Populus shows that around 40 per cent of consumers have ‘no idea’ what security is currently in place at their bank, despite 81% expecting their bank to inform them about security measures they should take.

The latest statistics highlight consumer concerns about the banking sector, following a string of high-profile cyber attacks, all of which have brought bank fraud to the forefront of the public’s attention. In addition, less than a quarter (23%) of consumers currently believe their bank is more secure than any others, highlighting that there is room for banks to enhance their security reputation.

With online/mobile banking, as well as technology like contactless payments on the rise, consumers are naturally more concerned about the safety of their account. Almost half of respondents view security as one of the top three most important factors in decision-making when taking out an account. Only good interest rates (58%) and recommendations from family or friends (53%) rank higher.

Features ranking in the top 3 most important considerations for consumers when opening bank accounts
Good interest rates58%
Recommendation from family and friends53%
Strong security features49%
Overdraft facility43%
Additional free benefits (insurance etc)31%
Cashback on household bills28%
Financial incentive for switching accounts21%

However, while pressure is on the banks to increase their security, and reassure customers that their money is safe, consumers are still struggling to take the necessary steps to protect themselves on- and offline, or understand what behaviours could put them more at risk.

One in five (19%) bank customers say that their bank details aren’t secure enough, yet 29 per cent admit they use the same password for multiple accounts, and a further 13 per cent admit writing their full account details in text and instant messages.

Percentage of consumers  who have done the following…
Have asked their web browsers to remember their passwords32%
Used the same password for more than one account or log-in29%
Let their card out of their sight while paying in public15%
Accessed their bank account on public wifi13%
Written their full bank details in a text or online message13%
Put card details into websites they don’t know and trust10%

In addition, those who choose to bank with tier one* account providers are more likely to believe they will be a victim of bank fraud over the next five years than customers with smaller or challenger banks.

Almost a third (29%) of consumers who have their main account with a major bank, believe it is likely they will be a victim of fraud. In comparison, just 19 per cent of those who have their account with a challenger bank or smaller provider (tier 3*) said the same.

Interestingly, those who bank with tier three* providers were also the least reliant on their bank to keep their details safe (66%), while those who bank with tier one and two both had higher expectations of their bank to look after their information (both 76%). This could suggest a more proactive approach to finance and online security from consumers who choose smaller banks.

Consumers have also highlighted which individual banks they believe are best at being proactive with their security. This includes activities such as advising customers how to avoid scams, increasing security stages during log ins (e.g biometrics), and encouraging the use of recommended securtity software for customers banking online.

Top 3 banks consumers believe are best at being proactive about their security
Nationwide
Natwest
TSB

Gary Muncaster, MD of Business and Consumer Insight at Populus said:

“It’s crucial that all banks understand how seriously consumers take their banking security. By knowing how important it is, banks can start to focus more on the priorities; whether that’s advising people how to stay safe online or dealing with any fraud issues effectively. Reassuring customers that security is a key priority is something that all the banks can improve on, and something our research has shown would be valuable for account holders.”