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FICO survey: 1 in 6 Indonesian consumers will leave a bank for a competitor if they are unhappy with the response to scams

By on October 27, 2022 0

Jakarta, Indonesia–(BUSINESS WIRE)–FICO (NYSE: FICO):

Strong points

  • 1 in 6 Indonesian consumers will go to a competitor if they are unhappy with their bank’s response to fraud management

  • 34% of Indonesians are most concerned about account takeover (ATO) fraud, followed by identity theft (29%).

  • 13% of Indonesian consumers think banks could do more to protect them

FICO’s latest Global Fraud Survey found that one in six Indonesian consumers will leave with a competitor if they are unhappy with their bank’s fraud handling response. This comes at a time, post-pandemic, when 67% of consumers say they will continue to do all their banking online. Indonesia also reported a higher fraud rate than most markets surveyed.

With Indonesia having around 135 million banking customers, this 1 in 6 Indonesian consumers still represents a turnover of around 21 million people, providing an opportunity for institutions that can better handle the problem.

More information:

Indonesians Most Concerned About ATO Fraud But May Be Overlooking Other Emerging Threats

The survey of a dozen countries found that Indonesian customers were most concerned about ATO fraud (34%), followed by identity theft (29%). However, only 23% of customers have experienced ATO fraud, so the percentage of customers concerned about ATO fraud far exceeds those who have experienced it.

At the same time, there are other emerging scams that Indonesians may not pay enough attention to. While only 17% of Indonesian customers are most affected by card fraud, over 70% of internet credit card transactions attempted in Indonesia are fraudulent. Additionally, although more than half (54%) of customers in Indonesia plan to use real-time payments more in the coming year, only 10% are most concerned about sending a payment in real time to a fraudster – a type of a crime known as authorized push payment (APP) fraud.

“APP fraud is becoming a bigger problem in Indonesia as we witness a boom in the use of real-time payments,” said CK Leo, FICO’s Asia-Pacific Fraud, Security and Financial Crime Lead. “Fraudsters are attracted to these schemes because they clear funds instantly, allowing them to trick victims and then launder the funds through a maze of accounts.

“Protecting their payments in real time requires analytics that look for changes in customer behavior, such as account or device usage outside of their usual habits, as well as standard anomalies such as time day or frequency of a transfer FICO has found that using targeted customer behavior profiling to spot scams has had impressive results with 50% more fraudulent transactions being detected.

Balancing strong fraud protection with convenience

In Indonesia, 47% of respondents say they have reported real or suspected fraud or scams to their banks, which is higher than the global average of 41%. Despite this, most Indonesian customers (85%) say their banks do enough to protect their money. Only 13% think banks could do more, but that still equates to a potential of over 17 million customers with negative perceptions.

When it comes to convenience, 44% of customers in Indonesia are most irritated by fraud transaction alerts that are late or never arrive. Additionally, 29% of customers do not like banks changing the methods used to authenticate customers.

“The rise in adoption of digital payment methods not only widens the attack surface for fraud, but creates a more complex set of customer experience issues,” explains Leo. “It pits the need for superior fraud management against the desire to facilitate customer communication, authentication and verification preferences.”

The perception of safety is paramount

The survey also demonstrated that there is a correlation between the perceived effectiveness of a security method and people’s preference for using it.

When it comes to payment verification, 37% of customers prefer SMS, despite security risks such as SIM swapping scams. A further 22% would prefer to use email, while only 18% prefer using their bank’s app.

Another 15% are ready to switch to a third-party messaging app. In fact, Indonesian consumers are more than twice as likely as the rest of the global survey group to prefer third-party messaging apps for payment verification. Most of this group, 70%, prefer online banking and 54% plan to use more real-time payments in the coming year, demonstrating their willingness to adopt new banking technologies .

With the diversity of customer preferences across digital and traditional channels in Indonesia, banks will need to cater to a variety of preferences while encouraging customers to adopt the safest and most secure communication channels.

“People develop a sense of trust and comfort around a way of doing things, especially if it has protected them from scams so far,” said Leo. “As a result, it takes time for customers to develop trust in new security methods, even if they are better. Banks need to remain flexible, but find ways to show that the new channels are reliable, efficient and more convenient. »

The survey was carried out in September 2021 by an independent research company adhering to the standards of the research industry. 1,001 Indonesian adults were interviewed, as well as 11,027 other consumers in Brazil, Canada, Chile, Colombia, Germany, India, Mexico, South Africa, Thailand, United Kingdom and United States

About FICO

FICO (NYSE: FICO) powers the decisions that help people and businesses around the world thrive. Founded in 1956, the company pioneers the use of predictive analytics and data science to improve operational decisions. FICO holds more than 205 U.S. and foreign patents on technologies that increase profitability, customer satisfaction and business growth in financial services, telecommunications, healthcare, retail and many other industries. With FICO solutions, businesses in more than 120 countries are doing everything from protecting 2.6 billion payment cards from fraud, to helping people get credit, to ensuring that millions of planes and rental cars are in the right place at the right time.

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