FICO survey shows a growing acceptance of security measures as online account opening surges
- 4 percent of UK survey respondents know their identity has been stolen to open an account and a further 10 percent think it’s likely
- 66 percent understand ID proofing happens to protect their accounts from fraud
- 61 percent view security checks as method for banks to protect themselves
- 62 percent would choose to open a bank account digitally
- FICO discusses the results in two new podcasts with Iona Bain
FICO’s identity proofing and digital banking survey shows identity theft is a tangible threat for people in the UK – 4 percent said they know their identity has been stolen and used by a fraudster to open an account, while a further 10 percent believe it is likely to have happened.
Along with a whole-hearted preference to open and manage financial accounts online, according to the FICO research there is also a widespread eagerness to comply with security checks.
FICO will discuss the results in a session at its free virtual event Success Realized: Digital Transformation Delivered, which runs April 26-30. In addition, FICO has released two podcasts for the UK featuring FICO’s fraud experts and Iona Bain, founder of the pioneering Young Money Blog, the UK’s foremost blog dedicated to young people’s finances: Identity Theft, COVID-19 and Digital Acceleration and Digital Natives, Disruption and Application Abandonment.
Understanding ID Proofing
Two-thirds (66 percent) of respondents recognized that identity proofing happens for their protection. Most people are not cynical about the reasons their identity is confirmed. While 46 percent recognize there is an element of regulation driving providers to carry out more checks, only 13 percent think this is done to enable financial institutions to sell more.
A majority (61 percent) of respondents also saw identity proofing as a way for banks to protect themselves, and 56 percent regard it as a tool to prevent money laundering.
“The results from the survey show messages about financial security are resonating with consumers and that is extremely encouraging to see. While banks and financial service providers can create checks and tests to prevent fraud, it will always exist and consumers must play their role in protection,” said Matt Cox, who oversees fraud and financial crime solutions for EMEA at FICO. “Education and understanding why these checks exist are both important to the process. It is all about safeguarding their identities and finances.”
Digital Account Opening Accelerated by COVID-19
It comes as no surprise to learn the pandemic has encouraged people to make online applications for financial accounts. The survey showed 31 percent are more likely to open an account digitally than they were a year ago. Additionally, 32 percent are now less likely to open a financial account in a branch, compared with the same time last year.
Consumers’ preferences for opening a current account have also shifted. The current, most common method for opening an account is through a provider’s website; 43 percent of respondents selected this option. Going into a branch to open an account has dropped to the second most-used option, with 26 percent preferring to do so. And 19 percent of respondents prefer to use apps when opening a current account. Only 6 percent of respondents would open an account over the phone, and just 2 percent by post.
“The account opening preferences shed light on a sped-up process. Digital account opening was increasing long before COVID-19, but now, after having spent a year learning, navigating, and familiarizing with online options, consumers are becoming comfortable with them,” continued Cox. “Bank branches will not re-open at the same level as before the pandemic, so it is important consumers continue to build their expertise of online banking.”
The survey did, however, produce some surprising results, with a particular reluctance from Generation Z to open an account online. This age bracket is often described as “digitally native”, but while they may be comfortable with social media and entertainment apps, their financial literacy is not as proficient. Further education efforts may be needed to usher Generation Z towards digitally managing their finances.
Rather than just using their banks’ websites, Generation Z also revealed an appetite for apps. In the age group of 18-24, 35 percent said they would choose to use an app, while only 14 percent would prefer to sign up on a webpage.
This online survey was conducted in January 2021 by an independent research company adhering to research industry standards. 1,000 UK adults were surveyed, along with 13,000 consumers in the USA, Canada, South Africa, Indonesia, Vietnam, Philippines, Malaysia, Thailand, Australia, New Zealand, Brazil, Colombia and Mexico.
Source: FICO Press Release