A new research by GFT UK has revealed that almost half of surveyed banking customers “either have or know someone who has been a victim of financial fraud.”
Around 48% of the surveyed aged between 25 and 34 in GFT’s ‘Banking Disruption Index’ report have said that they have personally experienced banking fraud on various levels. The average reported sum taken from people was estimated to be £570.
Furthermore, one in five (22%) of victims say they’ve had to wait up to two weeks to get the stolen funds reimbursed by their bank.
GFT also found that despite the expansive anti-fraud measures being put in place by banks to protect their customers, 34% of younger banking customers believe that the security is not fit for purpose.
To reinforce this statement, the company further cited data from UK Finance which highlighted that £1.2bn was stolen in 2022 through transaction fraud, and that Authorised Push Payment (APP) fraud has gradually increased by 22%.
Richard Kalas, Client Solutions Director, Retail Banking at GFT UK, said: “This data highlights the growing issue of fraud for younger banking customers, who are more willing to adopt new technology and share data.
“As banks continue to champion digital innovation, they must find a balance to ensure their customers feel protected with the least friction or intrusion.”
Comparing generations as the preferred target for fraudsters, GFT noted that only a quarter (24%) of those aged above 55 have been a victim to fraud or know someone who has been – making younger people the criminals’ favourite to steal money from.
However, estimates detail that older consumers lose the most money when being targeted, with an average of £938 being stolen from a single attack.
Advancements in digital banking have certainly been the way forward when it comes to combating banking fraud, but some level of uncertainty still exists among customers, with GFT data revealing that 40% of consumers trust a traditional bank more than a neobank to retrieve their money when a fraud case occurs.
Simon Newton, Principal Security Lead at GFT UK, said: “The boom in digital banking and artificial intelligence can be seen as both a challenge for the banking sector as it catalyses increasing levels of fraud, as well as an opportunity for financial institutions to tackle it.
“Our research clearly demonstrates there is a greater need for education on the risks, as well as scope for increased security measures from banks. Applying AI and large data for payment screening is one way that could provide banks and customers with greater levels of identification and protection.”