Addressing Fraud Concerns
The reliance on digital banking has skyrocketed since 2020. The pandemic forced financial institutions to shift even more services online, whilst restricted access to traditional channels left consumers little choice but to perform more of their banking digitally. RFI Global data shows that, at the end of 2020, half of consumers globally increased their usage of digital services as a result of the pandemic and very few of those moving away from physical channels out of necessity felt they would revert to their pre-pandemic channel usage. Mobile banking has been the biggest beneficiary. Within the last two years, 2 in 5 mobile banking users globally have adopted the channel and since the start of the pandemic mobile banking has overtaken online banking as the single most preferred channel for day-to-day banking.
Consumers who conduct all their day-to-day banking digitally
Yet, despite the proliferation of mobile banking services in recent years, consumers continue to turn to branches and online banking for more complex financial needs. Part of this preference is driven by perception that both branch and online banking are more secure to use than mobile. With digital banking fraud becoming a hot topic and a growing concern, particularly since the start of the pandemic when fraud incidents were on the rise globally, financial providers have come under strong pressure from consumers to proactively protect them. Reassuring consumers that their financial data and money are kept secure and offering strong security features and alerts have potential not only to increase consumer confidence when banking digitally, but also improve their overall digital banking satisfaction and encourage them to use mobile banking for a larger part of their banking needs.
Mitigating Banking Fraud Concerns
According to the data from RFI Global, half of consumers globally have been personally affected by banking fraud; 2 in 5 received suspicious communication and 1 in 7 fell victim to a financial fraud in the past. Indicative of how prevalent the banking fraud has become in recent years is the fact that over 2 in 5 consumers globally have heard a lot about fraud incidents and close to 1 in 4 know someone who was affected by this.
Which of these do you consider to be the biggest risk to keeping your money safe?
Consumers are concerned about a variety of potential risks, particularly having their banking information stolen. Given that when it comes to security consumers are still overwhelmingly more likely to place more trust in traditional banks over new digital only players to keep their money safe, turning to established providers to seek reassurance and keep their financial information and assets protected. This trust factor is the central pillar of relationship primacy and amongst the critical factors as to why consumers continue to entrust more traditional players with their main financial relationship and safeguarding their money.
Although, 70% of consumers are confident in their bank’s ability to protect them from fraud, 4 in 5 indicated banks could do more to educate them on how to stay safe and recognise fraud. However, to increase consumer confidence in mobile banking, financial providers should offer tangible guarantees and functionality to help customers stay safe. Our findings indicate that half of consumers globally would like their bank to provide guarantees that they would recover their money if they became a victim of digital banking fraud, whilst 2 in 5 would like their providers to offer a fraud monitoring and alert service to inform them of any suspicious activity.
How could your bank reassure you and protect you from fraud while using online or mobile banking?
Enhancing Security Features to Close Functionality Gaps
RFI Global research illustrates that 3 in 5 consumers feel that their concerns over fraud influence the way they bank. Consumers continue to rely on a variety of different channels when conducting their banking and whilst most of channel hopping is simply driven by convenience to complete tasks or borne from habit, security is also a key factor in these decisions.
Globally, many consumers are still more likely to trust the security of online banking than mobile and many view online banking as a safer option to conduct certain banking activities. Therefore, addressing this perceived security deficit will be important to sustain momentum in mobile banking adoption, with more consumers encouraged to use mobile banking for all their financial needs.
Equipping consumers with more powerful security features would also help banks drive up mobile banking satisfaction. Security features are among the most important aspects influencing overall satisfaction with mobile banking and are the key area of improvement. Among 2 in 5 consumers identified gaps in digital banking propositions that they would like their provider to address.
Finally, offering reassurance around mobile banking security will be key to extending its uptake. While mobile banking adoption has increased significantly in recent years, 1 in 5 banked consumers globally continue to shun the channel altogether. Lack of trust in mobile banking and security concerns are the key barriers cited by non-users, therefore addressing these real concerns will be needed to increase overall uptake.
The pandemic and its aftermath presented financial institutions around the world with a tremendous opportunity to shift more services and customer traffic onto digital banking platforms. While this increased digitalisation of banking services is a trend that pre-dates the pandemic, the last two years saw a dramatic and irreversible acceleration in this shift. To fully capitalise on this opportunity banks will need to ensure consumers feel confident and secure when using digital services, particularly through their mobile apps and especially for the more complex banking tasks. Building consumer confidence and offering both reassurance and strong security features will be important not only to maintaining momentum in mobile banking growth but also to building a strong overall mobile banking experience.
For an overview of our latest mobile banking findings and to access more insights from our Global Digital Banking Council reach out to [email protected].