More than one-fourth (29 per cent) of bank customers and 22 per cent of credit card customers have experienced some instance of fraudulent activity on their accounts in the past 12 months alone, according to a new study by J.D. Power, the consumer intelligence company.
The inaugural J.D. Power US Financial Protection Satisfaction Study, reveals that 26 per cent of bank customers and 31 per cent of credit card customers have not taken any recent measures to secure their accounts. This suggests that more work must be done so consumers are more aware of how to keep their accounts safe.
Among those who have taken proactive measures, the most frequently used strategy is reviewing recent transactions for suspicious activity, which is not preventative. When it comes to true fraud prevention tactics, such as adding two-factor authentication, setting up account alerts or using face ID or fingerprint authentication to log into accounts, are being taken by customers no more than 20 per cent of the time.
As financial fraud levels continue to grow, the financial protection that financial institutions provide is becoming a key component of overall customer satisfaction, brand loyalty and advocacy.
Nearly half (46 per cent) of bank customers and 49 per cent of credit card customers said they have a more positive impression of their bank or credit card issuer after experiencing an instance of fraud, and 92 per cent of bank customers are likely to reuse their bank after experiencing a fraud issue and having it resolved.
Fraud presents a customer experience ‘opportunity’
“Financial fraud is a big problem for banks and credit card issuers, but it also presents an opportunity from a customer experience perspective when it is handled well,” explains Jennifer White, senior director for banking and payments intelligence at J.D. Power. “In fact, customer likelihood to reuse their bank or credit card company and then recommend that entity to friends is actually higher after an institution helps prevent or resolves a fraud incident than when there is no fraud incident at all.
“However, many institutions still have a lot of work to do when it comes to educating customers on how to protect themselves.”
J.D. Power also found that, while bank and credit card fraud affects many, younger customers are being hit the hardest. Overall, 29 per cent of bank customers and 22 per cent of credit card customers experienced some form of financial fraud on their accounts in the past 12 months, with many experiencing more than one instance of fraud in that period. Among bank customers under age 40, 42 per cent have experienced some form of checking, savings or debit fraud in the past 12 months.
Forty-six per cent of bank customers say they’ve been prompted by their bank to act on fraud prevention measures in the past 90 days. That number falls to just 40 per cent among credit card customers.
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