25th August 2022 - 3 min read
A global consumer fraud survey by data analytics firm, FICO has revealed that one in three Malaysian consumers consider good fraud and scam protection to be a priority when selecting new financial accounts. This comes as most Malaysians exhibit a preference to do all their banking digitally in a post-pandemic period, with a growing awareness of the need for strong protection against online scams.
“With around 23 million banking customers in Malaysia, if a third of consumers are filtering financial providers to find those with the strongest fraud protection, that’s a market of more than 7 million,” said the lead for fraud, security and financial crime in Asia Pacific for FICO, CK Leo. He further added that this is a significant opportunity for banks, in which good fraud protection can be their biggest sales asset instead of just an operating cost.
Aside from that, FICO’s survey also noted that 6% of Malaysian adults – equivalent to 1.3 million individuals – know that they have been a victim of identity theft. Meanwhile, 12% (2.6 million) think that their identities may have been compromised and are being used to open an account fraudulently.
Additionally, more Malaysians have also demonstrated a growing awareness of Authorised Push Payment (APP) fraud – a kind of scam where fraudsters trick consumers into sending them money. “Fraudsters are attracted to these scams [APP fraud] as the victims bypass checks by authorising the payments themselves, with the funds clearing instantly and laundered through a maze of accounts,” explained Leo.
FICO’s survey also highlighted that Malaysian customers aren’t just prioritising better fraud protection; they also seek for convenience. Identity checks that are too difficult or time-consuming will turn them away from opening a range of different accounts. Specifically, 37% of survey respondents said that they have given up on opening a savings account for this reason, whereas 29% on credit cards. Another 27% said they backed out of personal loan applications due to a difficult onboarding process.
On top of that, many Malaysians have also indicated a growing preference for biometric security, believing them to be the most secure; 52% of the respondents said that fingerprints were the best, while 47% preferred face scans. There is, however, still a group that continues to cling to traditional, less secure verification methods. For instance, 34% showed a strong preference for old-fashioned usernames and passwords, while 37% preferred to receive passcodes via SMS.
“People develop a sense of trust and comfort around a way of doing things, especially if it has protected them from scams so far. As a result, it takes a while for customers to develop confidence in new security methods, even if they are better. Banks need to remain flexible but find ways to show new channels are trustworthy, effective, and more convenient,” Leo elaborated.
FICO’s survey was conducted in August 2022, and polled approximately 1,000 Malaysian adults. This is on top of another 13,000 consumers in various other countries, including Brazil, Canada, Indonesia, as well as United States and United Kingdom.
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