New Consumer Research Highlights the True Cost of Cybercrime — and Cybercrime Prevention
There is no doubt we live in an increasingly digital world. We are in the midst of a digital transformation, as more and more consumers rely on online and—increasingly—mobile channels to conduct their everyday business. From banking to shopping to making plans with friends, digital interactions are becoming the primary mode of engagement for consumers of all ages.
This digital transformation is creating opportunities for banks to lower servicing costs and provide increased convenience. But it is also creating inroads for fraudsters looking to leverage technology to steal debit/credit card data, gain access to consumer bank accounts, and/or open fraudulent accounts using a stolen identity. Digital account security has become an imperative for banks, retailers, and other providers, and it will only become more important over time.
The challenge banks face is preventing fraud and cybercrime while maintaining the quality of their digital experience. As consumers become more digitally engaged, their expectations increase. With access to unprecedented amounts of information, consumers demand more, better, and faster experiences. Nimble startups and innovative FinTech companies are threatening to erode bank margins, targeting consumers with a variety of alternatives to traditional banking products while leveraging new technology to deliver potentially superior experiences. In this environment, banks must find ways to provide a streamlined, dynamic, and engaging experience, while at the same time maintaining the stalwart security and trust that is the cornerstone of traditional banking relationships.
Earlier this year, ThreatMetrix and First Annapolis partnered to conduct an industry-first study exploring consumer perceptions of online/mobile banking and payments security, with the intent of better understanding the effects of fraud and current digital security measures on consumers’ banking relationships. Based on responses from 3,090 consumers evenly split across the U.S., U.K., and Australia, study results suggest that banks need to invest not only in preventing fraud and cybercrime, but also in preventing the friction and failures that accompany consumer-facing prevention techniques in the digital environment. The penalty for failure is not just higher fraud losses and increased operating expenses, but loss of customer relationships: one year’s worth of fraud and friction is estimated to cost U.S. banks alone $14.9 billion in lost relationship value.
To download the full 37-page report, click here.
For more information, please contact Josh Gilbert, Partner, firstname.lastname@example.org; or Melissa Fox, Manager, email@example.com. Both specialize in Payments Strategy and Innovation.
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