New Report Shows 1 in 4 Consumers Feel Banks Are Vulnerable to Online Fraud

Research explores how consumer trust and behaviour have been impacted when transacting online 

MYPINPAD, an enabler of multi-factor authentication for touchscreen devices, such as smartphones and tablets, has launched the findings from its exclusive survey: Consumer Trust and Mobile Payments Growth.

The unique research explores how and why online commerce has been damaged by fraud, the effects this has had on consumers’ subsequent decisions about transacting online, and the level of trust consumers have in online commerce and banking.

David Poole, Business Development Director at MYPINPAD, said: “The number of users accessing retail banking services via smartphones, tablets, PCs and smartwatches will rise by more than half to nearly three billion by 2021.[1] In compliance with new payments regulation, there needs to be a consistent and convenient way for consumers to authenticate themselves for online transactions and, thus, increase consumer confidence.”

“This research highlights the need for banks, retail, payment and card schemes to strike a better balance between user experience and security. For banks in particular, PIN is a technology that respects legacy infrastructure, minimises the need for change, already has the familiarity and trust of consumers and can be swiftly implemented on mobile and other touchscreen devices. Multi-factor authentication and transparency around appropriate security practices are key to winning consumer trust.”

Key findings:

Consumers do not believe transaction speed is more important than security. They want to see multi-factor authentication implemented

When asked what banks, merchants and PSPs could do to improve the trust consumers have in them:

• • 40% of respondents would like to use cardholder PIN as a means of authenticating an online transaction
• • 50% would like to use a combination of both PIN and biometrics
• • Only 2% of consumers believe transaction speed is more important than security

Why is this?

Consumers have huge concerns about fraud

• • Over two-thirds of respondents, 67%, are concerned about their online banking and shopping security, with one in four respondents being ‘very concerned’
• • Just under one in three of our survey respondents said they have been a victim of online fraud
• • Smaller independent retailers are perceived to be the most vulnerable to online fraud. Yet, a disturbingly high number of respondents – one in four – also felt banks were vulnerable to online fraud

Trust is being harmed, impacting on consumers’ behaviour

• • 61% stated that information about data breaches and online fraud has impacted their trust of online shopping and banking
• • As a result, 11% shop less and almost one in 10 said they do not use mobile devices to carry out transactions

This survey is the second in a series and an important piece of research for anyone looking to understand the dynamics around consumer trust. It explores what banks, retailers and payments processors could do to boost and retain customer trust, specifically in terms of security, authentication, and the opportunities for those who capitalise it.

The full report with further findings from the 2017 Consumer Trust Survey can be downloaded here.

MYPINPAD’s technology creates a trusted and hardened environment to protect sensitive consumer operations on devices such as tablets and smartphones. Available as an SDK, the solution allows for rapid and simple integration into an Acquirer’s, Issuers or PSP’s existing technology stack, enabling bank grade, multi-factor authentication through the use of card PIN and FIDO Biometric credentials for financial transactions, secure sign-in and consumer on-boarding.