ThreatMetrix Uncovers $14.9 Billion Yearly Loss Due to Consumer Friction and Fraud Attrition

May 2, 2016

Q1 2016 research study by First Annapolis quantifies economic impact and identifies actions to prevent friction and fraud across digital banking and commerce channels

SAN JOSE, California – May 2, 2016 – Understanding the true ROI of both friction and fraud prevention is imperative for banks to avoid the erosion of customer lifetime value. To measure the long-term economic impact of adding unnecessary fraud controls to the consumer digital experience, ThreatMetrix®, The Digital Identity Company, conducted a sponsored research study in conjunction with First Annapolis, a leading consulting and M&A advisory firm. The research, “The Path to Digital Transformation: Controlling Friction While Tackling Cybercrime in Financial Services,” is available today.

This Q1 2016 multi-market study explored consumer perceptions of online and mobile banking and payments security by analyzing responses from 3,090 consumers across the U.S., U.K. and Australia. Among the many takeaways from the study was this staggering insight: one year’s worth of friction and fraud is estimated to cost U.S. banks $14.9 billion in lost relationship value.  Consistent levels of friction and fraud over a five-year period would translate into a cumulative $74.3 billion – which does not include the life-time value of their account, future cross-sell potential and referrals.

“There are an estimated 215 million banked consumers in the U.S. and more are utilizing digital banking every day, especially younger consumers who are changing the way we bank. Banks are witnessing a digital transformation that indicates no signs of slowing down,” said Josh Gilbert, partner, payment strategy and innovation with First Annapolis. “Our research suggests that financial institutions need to be not only fighting cybercrime, but also the attrition risk that comes with it.”

Click here to read the full press release.