Better education on payments and fraud prevention would help both consumers and financial institutions
Boston and London, August 14, 2013 – Consumers' concerns and fraud experiences can affect their behavior, inhibit acceptance of new electronic payments technologies, and even lead to consumers changing financial institutions, according to a new impact report, Global Fraud and Clueless Consumers from Aite Group. Understanding consumers' concerns, experiences, and resulting behaviors is therefore essential for financial institutions.
During Q3 2012, ACI Worldwide fielded its third annual survey of consumers in 17 countries in order to gain an understanding of consumer attitudes toward fraud from consumers who have experienced fraud as well as those who have not. Aite Group analyzed the survey results which cover the Americas, EMEA, and Asia-Pacific.
To retain customers and maximize card revenues, financial institutions and card issuers need to educate customers far better about payments. High percentages of customers are willing to partner with their institutions but are not certain what they should do. Aite Group found that consumers are confused about even simple payment issues, such as the difference between debit and credit cards and when PINs may be used. With the upcoming EMV rollout in several countries consumer confusion is certain to grow, aiding the fraudsters who love to take advantage of uncertainty and periods of change.
Financial institutions should also reassure customers about risk. If customers were more comfortable with using their cards online then this may increase card revenue. If using PINs is an option with debit and credit cards, customers should be better informed so they can take advantage of this extra layer of security, particularly with high-risk card transactions, such as during international travel.
“If financial institutions are actually providing education, it is not being done in a manner that the data is understood and retained, which is leading to "clueless consumers". As a result, consumers' perceptions may be distorted, resulting in confusion, dissatisfaction with the financial institution or even a change in financial institution provider,” says Shirley Inscoe, senior analyst in retail banking at Aite Group.
Aite Group's retail banking clients can download the report here.