IDnow: Banks need to acknowledge customer ‘risk appetite’ around fraud

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A YouGov study has delved into British consumers’ awareness of fraud risks. IDnow, the firm which commissioned the survey, believes this highlights the need for better education on fraud threats.

According to the survey, which quizzed 2,264 people on knowledge of fraud, found that 45% of UK adults were aware that scans or photos of ID documents could be used by criminals to commit fraud.

However, this same 45% reported that they often send copies of this information via digital channels such as email, social media and messenger apps despite being aware of the risk of identity fraud.

Interestingly, a generational divide was also noted, with 48% of 18-24 year olds revealing that they shared ID documents via ‘risky channels’ in contrast to 21% of over-55s. This is noteworthy due to younger generations having greater preference for digital payment methods and consumer interactions.

For example, GoDaddy recently broke down one of its own surveys to Payment Expert, with the study showing a distinct preference for contactless payment methods among Gen Z and millennial customers, driven by these generations coming of age in a highly digitised world.

However, the more recent research from YouGov and IDnow suggests that despite the younger generations’ exposure to the digital ecosystem since an early age, there may be a need to better educate this demographic about digital fraud threats.

These threats also come in the form of technological advancements. Much is often made in modern payments and fintech about the many benefits of AI, but IDnow noted that there is also a need to acknowledge the risks.

Deepfakes in particular are an area of concern for the company, whose research identified only 31% of UK adults being aware of these risks, such as impersonation of people’s likeness and documents.

Lovro Persen, Director Document and Fraud at IDnow, said: “Many of us have seen the uncanny deepfake videos of celebrities that spread like wildfire across the internet, showing how easy it is to emulate the likeness of someone using AI. 

“But worryingly, this research suggests that the UK public is not as concerned, or aware as they should be, of the risks associated with such digitally generated images or videos.

“The extraordinary leaps in AI technology mean it’s now almost too easy for a fraudster to carry out financial crimes. Consumers shouldn’t make it even easier for fraudsters though. Our advice is always to think twice before sending a scan or photo of your driving licence or passport into the digital ether via unencrypted channels, such as social media or email.”

Whilst consumer education may be important, the onus is not just on banking customers but also the banks themselves when it comes to fraud prevention. According to IDnow, many consumers are concerned about rising fraud threats.

For example, 37% of UK survey respondents said that they are worried about fraud via social media, with 21% believing they are most at risk of being hacked on social media, whilst 75% stated that they would be willing to go through a lengthier onboarding process if this meant more safety.

Whilst AI may be a cause of concern among consumers and fraud specialists, it has also provided some hope for banks in this respect, with many keen to utilise the technology for better security purposes. Citing its survey data, however, IDnow has cautioned banks to ensure that fraud prevention remains front of mind.

Doug Pollock, Vice President Customer Success at IDnow, explained: “Our findings show that banks in the UK do not always go far enough to make their customers feel safe and secure. 

“They need to go further in terms of fraud prevention technology to meet their customers’ risk appetite, especially when their money is at stake. Because, and our research confirms this, if banks get it wrong, the majority of people (54%) would consider moving banks were they to become a victim of fraud.

“We hope these findings highlight the massive impact online fraud continues to have on British people. Because fraudsters work across industries, regions and use cases, it’s vital we all work together – financial services, technology providers, government, law enforcement and the public – to identify and stop fraudsters before it’s too late.”