The scams deluge that flourished during the COVID-19 pandemic and proliferates yet today has heightened the public’s fraud anxiety.
Rampant fraud is also “reshaping individuals’ expectations about organizations’ obligations to protect them – and the compromises they are willing to make to enhance security” – according to a new consumer fraud study by AI and analytics firm SAS.
Based on a survey of 13,500 consumers in 16 countries, Faces of Fraud: Consumer Experiences With Fraud and What It Means for Businesses “reveals the immensity” of the global fraud problem:
- Most consumers (70%) reported having experienced fraud at least once. Four in 10 indicated they have fallen victim to fraud twice or more.
- Nearly half (47%) said they experienced more fraud in 2022 compared to previously.
- Almost nine in 10 (86%) admitted to being more wary of fraud than in the past.
Stu Bradley, Senior Vice President of Risk, Fraud and Compliance at SAS, said:
“When fraudsters are successful in their exploits, organizations in highly targeted industries like banking, insurance, government, retail and telecommunications serve as unwitting conduits for criminal activity.”
Consumers’ shifting attitudes underscore “the importance of robust fraud defenses, with 89% of respondents indicating that organizations should be doing more to protect against fraud.”
The silver lining for businesses? Most of their customers “are willing to sacrifice some convenience” for stronger safeguards:
- Three-quarters said they would agree to more delays and checks in transactions for better fraud protection.
- Eight in 10 are willing to use biometric methods like facial recognition, hand geometry, retinal identification or voice recognition for payments and transactions. Further, more than half (57%) prefer to use unique identifiers like biometrics to authenticate at time of transaction versus remembering fixed passwords.
AI-enabled fraud detection can “deliver the best of both worlds by helping organizations find more fraud earlier and much more quickly, improving both the efficiency and accuracy of their real-time fraud detection and prevention strategies.”
Unlike rules, which are easy for fraudsters “to test and circumvent, the application of machine learning can help organizations better identify anomalies in real time and stay ahead of rapidly evolving threats.”
Methodology
SAS commissioned 3Gem Research and Insights to undertake “a global study into some of the key trends in fraud against consumers at the end of 2022.”
The findings are based “on a sample size of 13,500, with a 50/50 split of men and women.”