2016 global consumer card fraud: where card fraud is ... · 2016 global consumer card fraud: where...
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2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
JULY2016
BenKnieff
Researchsponsoredby:
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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TABLEOFCONTENTSIMPACTPOINTS..............................................................................................................................................4INTRODUCTION..............................................................................................................................................5
METHODOLOGY........................................................................................................................................5GLOBALCARDFRAUDSNAPSHOT..................................................................................................................7FRAUDINTHEAMERICAS.............................................................................................................................15
RISKYBEHAVIOR.....................................................................................................................................15REPLACEMENTCARDS............................................................................................................................18CONSUMERATTITUDESTOWARDFRAUD..............................................................................................23
FRAUDINEUROPE,THEMIDDLEEAST,ANDAFRICA...................................................................................25RISKYBEHAVIOR.....................................................................................................................................25REPLACEMENTCARDS............................................................................................................................28CONSUMERATTITUDESTOWARDFRAUD..............................................................................................33
FRAUDINTHEASIA-PACIFIC.........................................................................................................................37RISKYBEHAVIOR.....................................................................................................................................37REPLACEMENTCARDS............................................................................................................................40CONSUMERATTITUDESTOWARDFRAUD..............................................................................................44
RECOMMENDATIONS...................................................................................................................................46RELATEDAITEGROUPRESEARCH.................................................................................................................47ABOUTAITEGROUP.....................................................................................................................................48
AUTHORINFORMATION.........................................................................................................................48CONTACT................................................................................................................................................48
LISTOFFIGURESFIGURE1:COUNTRIESSURVEYED..................................................................................................................6FIGURE2:CURRENTTOTALCARDFRAUDRATESBYCOUNTRY.....................................................................8FIGURE3:CURRENTCREDITCARDFRAUDRATES........................................................................................10FIGURE4:CURRENTDEBITCARDFRAUDRATES..........................................................................................12FIGURE5:MULTIPLEFRAUDINCIDENTS......................................................................................................13FIGURE6:CURRENTPREPAIDCARDFRAUDRATES.....................................................................................14FIGURE7:RISKYBEHAVIORINTHEAMERICAS............................................................................................16FIGURE8:RISKYBEHAVIORTRENDSINTHEAMERICAS...............................................................................17FIGURE9:RISKYBEHAVIORANDFRAUDEXPERIENCEDINTHEAMERICAS.................................................18FIGURE10:REPLACEMENTCARDSINTHEAMERICAS.................................................................................19FIGURE11:USEOFREPLACEMENTCARDSINTHEAMERICAS.....................................................................20FIGURE12:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINTHEAMERICAS.....................21FIGURE13:SWITCHINGBEHAVIORINTHEAMERICAS................................................................................22FIGURE14:BACK-OF-WALLETBEHAVIORINTHEAMERICAS.......................................................................22FIGURE15:CONSUMERTRUSTINFINANCIALINSTITUTIONSINTHEAMERICAS........................................23
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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FIGURE16:CONSUMERS’FRAUDCONCERNSINTHEAMERICAS................................................................24FIGURE17:RISKYBEHAVIORINEUROZONE................................................................................................25FIGURE18:RISKYBEHAVIORINEMEA(NON-EUROZONE)...........................................................................26FIGURE19:RISKYBEHAVIORANDFRAUDEXPERIENCEDINEUROZONE.....................................................27FIGURE20:RISKYBEHAVIORANDFRAUDEXPERIENCEDINEMEA(NON-EUROZONE)...............................28FIGURE21:REPLACEMENTCARDSINEUROZONE.......................................................................................29FIGURE22:REPLACEMENTCARDSINEMEA(NON-EUROZONE)..................................................................29FIGURE23:USEOFREPLACEMENTCARDSINEMEA....................................................................................30FIGURE24:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINEUROZONE...........................31FIGURE25:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINEMEA(NON-EUROZONE).....31FIGURE26:SWITCHINGBEHAVIORINEMEA...............................................................................................32FIGURE27:BACK-OF-WALLETBEHAVIORINEUROZONE.............................................................................33FIGURE28:BACK-OF-WALLETBEHAVIORINEMEA(NON-EUROZONE).......................................................33FIGURE29:CONSUMERS’TRUSTINFINANCIALINSTITUTIONSINEUROZONE............................................34FIGURE30:CONSUMERS’TRUSTINFINANCIALINSTITUTIONSINEMEA(NON-EUROZONE)......................34FIGURE31:CONSUMERS’FRAUDCONCERNSINEUROZONE......................................................................35FIGURE32:CONSUMERS’FRAUDCONCERNSINEMEA(NON-EUROZONE)................................................36FIGURE33:RISKYBEHAVIORINTHEASIA-PACIFIC......................................................................................38FIGURE34:RISKYBEHAVIORTRENDSINTHEASIA-PACIFIC.........................................................................39FIGURE35:RISKYBEHAVIORANDFRAUDEXPERIENCEDINTHEASIA-PACIFIC...........................................40FIGURE36:REPLACEMENTCARDSINTHEASIA-PACIFIC.............................................................................41FIGURE37:USEOFREPLACEMENTCARDSINTHEASIA-PACIFIC.................................................................41FIGURE38:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINTHEASIA-PACIFIC.................42FIGURE39:SWITCHINGBEHAVIORINTHEASIA-PACIFIC............................................................................43FIGURE40:BACK-OF-WALLETBEHAVIORINTHEASIA-PACIFIC...................................................................43FIGURE41:CONSUMERS’TRUSTINFINANCIALINSTITUTIONSINTHEASIA-PACIFIC..................................44FIGURE42:CONSUMERS’FRAUDCONCERNSINTHEASIA-PACIFIC............................................................45
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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IMPACTPOINTS• ThisImpactReport,basedonaQ22016ACIWorldwidestudyof6,035consumersin
20countries,providesanoverviewofrespondents’attitudestowardvarioustypesofcardfraudanddiscussestheactionstheymaytakesubsequenttoafraudexperience.Whereapplicable,italsocomparestheseresultswiththosefromsimilarACIsurveysin2012and2014.
• Ofallcardholders—debit,credit,andprepaid—30%haveexperiencedcardfraudinthepastfiveyears,asignificantportionofcardholders.
• Afterexperiencingfraud,40%ofconsumersusethereplacementcardless,atleastinsomesituations,thantheyusedthatcardpreviously.Thisback-of-walletbehaviorislostrevenueforthefinancialinstitution.
• In2016,17%ofdebitandcreditcardholderscitehavingexperiencedfraudmultipletimesduringthepastfiveyears,comparedto13%in2014.
• Consumerswhoaredissatisfiedwithhowtheyaretreatedbytheirfinancialinstitutionafterexperiencingfraudsometimeschangeproviders,resultinginaglobalattritionrateof20%.Thishighlightstheimportanceofaftercarefollowingafraudexperience.
• Fourteenpercentofglobalconsumerslackconfidencethattheirfinancialinstitutioncanprotectthemagainstfraud.Whilethisvariesfromregiontoregion,itdemonstratessomelevelofmisunderstandingaboutwhatstepsinstitutionstake.
• Fifty-fourpercentofglobalconsumersexhibitatleastoneriskybehavior,whichputsthemathigherriskoffinancialfraud.Educationaboutriskybehaviorsandwhatconsumerscandocanhelpreducefraudratesissorelyneeded—banksmustlearnhowtohelpconsumershelpthemselves.
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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INTRODUCTIONWith2,260confirmeddatabreaches
1in2015aloneandover4billiondatarecordsstolensince
2013,2thesecurityofthefinancialservicesvaluechainisacriticaltopicwithintheindustryand
amongconsumers.Atthispointintime,theassumptionshouldbethatalmostallusers’credentialsand/orcardinformationhasbeencompromised.Theundergroundeconomyforuserinformationhasmaturedsomuchthatitisindistinguishablefromalegitimateeconomy.Therearevariousserviceproviders,service-levelagreements,andveryefficientsupply-demand-basedpricing.Itnolongerrequiressophisticatedcomputerscienceskillstoperpetratefraud,asmosteverythingrequiredcanbeacquiredofftheshelffromtheundergroundmarket.
ThisImpactReport,thefirstinatwo-partseriesonhowfinancialfraudaffectsconsumers,willlookatconsumerfraudexperiences,perceptionsoftrustinfinancialinstitutions,andriskyconsumerbehaviors.
3Thereportlooksat20differentcountriesfromtheAmericas;Europe,the
MiddleEast,andAfrica(EMEA);andtheAsia-Pacific.Therearesomebroadtrendsamongtheseregionsandthecountrieswithinthem,andtherearealsosomeinterestingoutliers.
METHODOLOGY ACIWorldwide,agloballeaderinelectronicpaymentsforfinancialinstitutions,retailers,andprocessors,conductedonlinequantitativemarketresearchinMarch2016andsurveyed6,035consumers.Thestudywasconductedinatotalof20countriesinthefollowingregions:
• TheAmericas(NorthandSouthAmerica):Brazil,Canada,Mexico,andtheUnitedStates
• EMEA:France,Germany,Hungary,Italy,theNetherlands,SouthAfrica,Spain,Sweden,theUnitedArabEmirates(UAE),andtheUnitedKingdom
• TheAsia-Pacific:Australia,India,Indonesia,NewZealand,Singapore,andThailand
China,Russia,andPolandwereremovedcomparedto2014,andSpain,Thailand,andHungarywereaddedfor2016(Figure1).
Thereweresomechangesinmethodologycomparedtothe2014reportthatleadstosomedifferenceswhencomparingthetworeports.The2014datawasreanalyzedin2016tomatchthesamemethodology,socomparisonsareapples-to-appleswithinthe2016report,butnotbetweenthe2014and2016reports.
1. Verizon,“2016DataBreachInvestigationsReport,”
http://www.verizonenterprise.com/resources/reports/rp_DBIR_2016_Report_en_xg.pdf,accessedMay22,2016.
2. “BreachLevelIndex,”http://breachlevelindex.com/#sthash.UU29yuUP.dpbs,accessedJune24,2016.
3. SeeAiteGroup’sreportGlobalConsumers:LosingConfidenceintheBattleAgainstFraud,June2014.
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Specifically,in2016theincidenceoffraudwascalculatedbasedthepopulationthatactuallyownedatypeofcard(credit,debit,prepaid),whereasin2014thecalculationwasbasedontheentirepopulation,irrespectiveofwhetherallindividualsownedtheparticulartypeofcard.
Figure1:CountriesSurveyed
Source:AiteGroupresearch
Intotal,6,159consumerswereincludedintheresearch:approximately300consumers,dividedequallybetweenmenandwomen,participatedineachofthe20countries.Ofthetotal,6,035ownoneormoretypeofpaymentcard—creditcard,debitcard,prepaidcard.ThisisthefourthtimethatACIhasfieldedthistypeofsurvey,andcomparativeresultsareincludedfrom2012and2014.
Ineachcountry,thedatahaveamarginoferrorofapproximately5points.Statisticaltestsofsignificance,whereshown,wereconductedatthe95%levelofconfidence.
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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GLOBALCARDFRAUDSNAPSHOTCardfraudincludesunauthorizedactivityonthethreemaintypesofpaymentcards—debit,credit,andprepaid.Cardfraudcancomefrommanydifferentangles,includingdatabreaches,lost/stolencards,socialengineering,phishingattacks,andoftenacombinationofthese.Fraudratesaroundtheworldvarygreatlyindifferentregionsandcountries.
ComparedtothestudyfieldedinQ12014,theratesoffraudamongvariouscountrieshavemoved,andfraudratesareincreasinginmanycountries(Figure2).Inthe2016study,Mexicohasthehighestrateofcreditcardfraudat51%,followedbytheUnitedStatesat46%,andBrazilat46%(Figure3).
MexicohasexperiencedarockyroadinimplementingEMV,withchallengesbothontheissuerandmerchantsidesoftheequation.Badactorstakeadvantageofconfusionandimplementationweaknesses,whichdrivesthishighfraudrate.
IntheU.S.,fraudratesaredrivenbythefactthatitisawealthyeconomyandthatcardpaymentsarethego-topaymentmethodformostconsumers.CombinedwiththeprevalenceofonlineshoppingandslowadoptionofEMV,theU.S.isstillagoldmineforcriminals.Basedonothercountries’experiencewithEMVadoption,itisexpectedthatcard-not-present(CNP)fraudwillincreaseastheU.S.continuestomigratetoEMV.
Brazilhasitsownchallenges;withafalteringeconomyandafragmentedcardpaymentsenvironment,itisanattractivemarketforcriminals.Brazilisalsoalargemarketforonlineshopping,butmanye-commercefirmsdonothavestrongcontrolsforfraudprevention.Therearemanyopportunitiestoimproveonlinesecurity,suchas3-DSecure2.0andactivereal-timetransactionmonitoringthatcouldhelpreducefraudratesinBrazil’smarket.
Lookingtowardthefuture,mobilewallets,newpaymentstypesthatcloselyresemblecardpaymentsorevenusethecardnetworkrails,andmobilepaymentschemesoutsidethenetworks(suchasM-PesainKenya)willbeahigherpriority.Whiletherearenumerousnewpaymenttypes,particularlyindevelopingeconomies,cardsandcard-likepaymentswillcontinuetodominateconsumerpaymentsinmostgeographiesforquitesometime.
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Figure2:CurrentTotalCardFraudRatesbyCountry
Source:AiteGroup,ACIWorldwidestudiesofconsumersin20countries,Q22016andQ12014,andin17countries,Q32012
56%
49%
47%
40%
37%
36%
35%
33%
29%
29%
27%
27%
26%
26%
23%
20%
18%
14%
14%
9%
33%
30%
41%
31%
41%
28%
21%
30%
26%
28%
44%
20%
22%
16%
10%
13%
44%
33%
42%
31%
37%
26%
25%
25%
20%
34%
36%
24%
18%
13%
12%
12%
Mexico
Brazil
United States
Australia
India
Singapore
Canada
South Africa
France
United Kingdom
Dubai (UAE)
Italy
Spain
Indonesia
Thailand
New Zealand
Germany
Sweden
The Netherlands
Hungary
Percentage of Respondents Who Have Experienced Card Fraud in the Last 5 Years, 2012 to 2016
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
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Creditcardfraudratesinthe2016studyshowthatconsumersaroundtheworldstillexperiencecardfraud,despitetheimplementationoffraudanalyticssolutionsandEMVinmanycountries.Thereisnoshortageofwayscriminalscantakeadvantageofcarddatatoperpetratefraud.
TheU.S.lagsinEMVimplementationcomparedtomostoftherestoftheworld,thoughthereissomeprogress.
4Solongastherearecountriesthatdonotacceptchipcardsfully,therewillstill
becardswithmagneticstripes,fortravelersiffornothingelse.Thismeansskimminganddatabreacheswillcontinuetobeachallenge,andCNPfraudwillcontinuetobeachallengeirrespectiveofEMVmigrations,barringsomeunforeseeninnovations.
Insomecountries,thereareindicatorsthatnotonlydoesCNPfraudincreasefollowingEMVrolloutbutalsoapplicationfraud.Whileapplicationfraudhasexistedsincebanksbeganopeningaccounts,itiseveneasiernowduetothebreadthofpersonalinformationavailablefrombreachesaswellasthehugeamountsofinformationpublishedbyconsumersonsiteslikeFacebook,LinkedIn,Instagram,andmanyothers.Thiswealthofdatahaseffectivelyrenderedknowledge-basedauthentication(KBA)uselessforauthenticationandmakesapplicationfraudsomucheasier.
4. SeeAiteGroup’sreportEMV:IssuanceTrajectoryandImpactonAccountTakeoverandCNP,May
2016.
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Figure3:CurrentCreditCardFraudRates
Source:AiteGroup,ACIWorldwidestudiesofconsumersin20countries,Q22016andQ12014,andin17countries,Q32012
TheimplementationofEMVwillalsocurtailcounterfeitfraudondebitcards.Issuersaregenerallyfocusedonissuingchipcardstotheirmostactiveusersaswellasonregularexpiry.
51%
46%
46%
37%
35%
32%
30%
28%
28%
28%
25%
25%
24%
24%
20%
18%
17%
12%
12%
8%
29%
37%
28%
28%
27%
19%
35%
26%
26%
14%
26%
17%
40%
15%
15%
8%
11%
38%
39%
31%
30%
24%
20%
29%
20%
19%
16%
31%
22%
33%
10%
11%
8%
Mexico
United States
Brazil
Australia
Singapore
Canada
India
South Africa
France
Spain
Indonesia
United Kingdom
Italy
Dubai (UAE)
Thailand
New Zealand
Germany
Sweden
The Netherlands
Hungary
Q. Have you experienced fraud on your credit card in the past 5 years?
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Smallerinstitutionsoftenneedtogetinaqueuewiththeircardprocessorstoissuechipcards.Someinstitutionsgotinthisqueueearly,butforthosetowardthebackofthequeue,itmaytakesometime,andtheinstitutionwillhavetocarrytheliabilitywhencardsareusedatchip-enabledpoint-of-sale(POS)terminals.
Whilesomeofthecountriessurveyedhavechanged,itisclearthatMexico,India,Brazil,andtheU.S.generallyhavesomeofthehighestcardfraudrates.Inthe2016study,cardholdersinMexicoexperiencethehighestrateofdebitcardfraudat34%,followedbyBrazil(25%),India(23%),andFrance(22%).TheU.S.closelytrailsFranceat21%.Inthe2014study,cardholdersinChinaexperiencedthehighestrateofdebitcardfraudat30%,followedbyIndia(24%),Mexico(21%),andtheUnitedStates(20%;Figure4).Mexico,Brazil,andFranceexperiencedratherdramaticincreasesindebitcardfraudin2016comparedto2014.
Itisnotablethatthecountrieswithhigherdebitcardusageratesrelativetocreditcardusagerates(e.g.,Sweden,theNetherlands,Germany)alsohaverelativelylowdebitcardfraudrates,inpartbecauseoftheextensiveandeffectiveimplementationofEMV,andalternativepaymentoptions(e.g.,ELVinGermany,Proton,andotherelectronicpurseoptions).
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure4:CurrentDebitCardFraudRates
Source:AiteGroup,ACIWorldwidestudiesofconsumersin20countries,Q22016andQ12014;andin17countries,Q32012
Aratherlargenumberofconsumersexperienceddebitand/orcreditcardfraudonmorethanoneoccasioninthelastfiveyears.Seventeenpercentofglobalconsumersexperienceddebitor
34%
25%
23%
22%
21%
19%
17%
17%
17%
17%
15%
15%
13%
13%
13%
13%
10%
8%
7%
6%
21%
13%
24%
15%
20%
16%
15%
7%
11%
11%
14%
10%
10%
9%
5%
8%
7%
26%
17%
21%
13%
22%
12%
17%
13%
9%
13%
11%
11%
9%
11%
9%
7%
Mexico
Brazil
India
France
United States
South Africa
Spain
United Kingdom
Canada
Australia
Singapore
Dubai (UAE)
Italy
Indonesia
Thailand
Sweden
New Zealand
The Netherlands
Germany
Hungary
Q. Have you experienced fraud on your debit card in the past 5 years?
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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creditcardfraudmorethanonceinthepastfiveyears,astatisticallysignificantincreasefrom2014and2012surveys(Figure5).Thewealthofstolenpaymentdetailsavailablethroughdatabreachesandphishingscamsmeanseveryoneisatargetandcanexperiencemultipleincidencesoffraudwithdifferentcards.Ascriminalstrytomaximizetheirtakefromasinglecard,fraudcanalsooccurmultipletimesforasinglecard.
Figure5:MultipleFraudIncidents
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Prepaidcardsarerelativelynewcomparedtocreditanddebitbutareincreasinglybeingusedforpublicbenefits,payroll,andasanalternativetoatraditionalcheckingorcurrentaccount.Prepaidcardusageandfraudratesvarywidelyacrossthecountriesrepresented.ThehighestrateoffraudonprepaidcardsisexperiencedbyconsumersinIndiaandBrazilat18%,followedbyMexicoat14%,thenItalyandIndonesiaat13%.France,Thailand,andSpainareequallycloseandwithinthemarginforerror.Consumersinmanyothercountriesexperiencelowfraudrates(Figure6).
Itislikelythatoverallusageratescorrelatetothesenumbers.Forexample,inIndiamanygovernmentemployeesarepaidviareloadableprepaidcards,andmanygovernmentbenefitsaredistributedthroughgovernmentprepaidcards.Anotherpotentialfactorinthelowerfraudratesisthatfewprepaidcardsareusedforaverylongtimeorcarryhighbalances;thus,theyarenotonlyamovingtargetforfraudstersbutalsoalower-valueone.Consumersmayalsonotdifferentiatebetweenopen-andclosed-loopcards,whichhavevaryinglevelsofvaluetocriminals.
13% 13%17%
2012 (n=4,813) 2014 (n=4,866) 2016 (n=4,699)
Q. Have you experienced more than 1 incident of debit or credit card fraud in the past 5 years?
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure6:CurrentPrepaidCardFraudRates
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016andQ12014;and17countriesinQ32012
18%
18%
14%
13%
13%
12%
12%
11%
9%
7%
7%
7%
5%
5%
4%
4%
4%
4%
4%
2%
20%
8%
8%
11%
12%
5%
11%
12%
6%
3%
3%
2%
2%
5%
3%
4%
3%
23%
9%
12%
10%
5%
4%
8%
8%
2%
3%
3%
3%
6%
4%
6%
2%
India
Brazil
Mexico
Italy
Indonesia
France
Thailand
Spain
Dubai (UAE)
Singapore
Australia
United Kingdom
Sweden
Canada
New Zealand
United States
Hungary
Germany
South Africa
The Netherlands
Q. Have you experienced fraud on your prepaid card in the past 5 years?
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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FRAUDINTHEAMERICASThissectionofthereportexaminesconsumerbehaviorsrelatedtofinancialfraudintheAmericas.ThereisalotofvarietyintheAmericas;theU.S.andCanadahavequitematurecardpaymentsenvironments,whilemarketsincountriessuchasMexicoandBrazilaremorenascent.Thisisreflectedinthefraudrates:TheU.S.andCanadahavematurecontrols,butothergeographies,despiteleveragingEMV,facehighratesoffraud.
R I SKY BEHAV IOR Consumerbehaviorhassomeimpactonwhethersomeonebecomesavictim.Incasessuchasadatabreachorskimming,theconsumerhaslittlecontrol,butconsumerscanhelptopreventphishing,lost/stolencards,andfriendlyfraud.Riskybehaviorssuchaskeepingone’sPINwiththecardhaveadirectcorrelationtoexperiencingfraud.Itisimportanttoeducatecustomers,butfinancialinstitutionsneedtoavoidcausingmentalfatiguethatwillleadtousersignoringthosemessages.
Thereisalwaysabalancebetweenusabilityandsecurity,andifsecuritybecomestooonerousfortheusers,theyfindawayaroundit(suchaswritingdownPINsorpasswords).Toohighofabarrieractuallymotivatesuserstoengageinriskybehaviors.Morefirmsarelookingforwaystoimprovecustomerexperienceandsecurityatthesametime.Passivebiometricsandmoreintelligentmonitoringtoolsaretwoexamplesoftechniquesusedtoimprovesecuritywhileavoidingnegativeuserimpact.Asmobilebankingandcardpaymentsgrowinadoption,therearenewriskswithuserssecuring,orfailingtosecure,theirdevices.
Thesurveyquestionedconsumersonwhethertheyhadengagedinfivedifferentriskybehaviorsinthelastfiveyears(Figure7).Therearecertainlyadditionalriskybehaviors,andtherewillbenewonesastechnologyevolves.
ConsumersinBrazilexhibitthemostriskybehaviors.Overaquarter(27%)statetheyleavesmartphonesunlockedwhennotinuse,and23%leavepersonalinformationinthetrashbin.Mexicoisnotfarbehindintherangeofriskybehaviors.ThereisastrongcontrastbetweenthefraudratesandbehaviorsintheU.S.andCanadacomparedtoBrazilandMexico;U.S.andCanadianconsumersexhibitmorecautionthattheirsoutherncounterparts(Figure7).
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure7:RiskyBehaviorintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Forcardfraudtodecrease,consumersmustplayarole,andlimitingriskybehaviorisonewayconsumerscanhelpprotectthemselves.Riskybehaviorsaregenerallyrising,muchofwhichcanbeattributedtotheincreaseinunsafesmartphoneusage(Figure8).Financialinstitutionscanbenefitbyfurthereducatingcustomersonbestpracticestokeepthemsecure.Additionaleducationcanbeavaluablecustomertouchpointandcansupportafinancialinstitution’sbrandasatrustworthypartner.
20%
18%
14%
9%
8%
20%
23%
18%
12%
10%
15%
16%
10%
7%
5%
27%
23%
22%
15%
11%
Left smartphone unlockedwhen not using it
Thrown papers ordocuments with account
numbers (e.g., bankstatements) in the trash
bin
Used online banking orinternet shopping withoutsecurity software or on a
public computer
Made a note of your PINand carried it with you or
kept it with your card
Responded to emails orcalls asking for bank
details
Q. Which of the following have you done in the past 5 years?
UnitedStatesMexico
Canada
Brazil
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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17
Figure8:RiskyBehaviorTrendsintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016andQ12014
Itisclearthat,ingeneral,consumerswhoavoidriskybehaviorsarelesslikelytoexperiencefraud(Figure9).Thispointstoeducationasakeycomponenttopreventingfraudattheuser-behaviorlevel.Themoreeducatedconsumersareaboutriskybehaviors,themorelikelytheyaretoavoidthosebehaviors.
33%20% 21% 27%
11%20% 12% 15%
27%
23%30% 23%
13%
18%
12%16%
20%
18%22% 22%
7%
14%
5%10%
9%
12%
12% 15%
6%
9%
6%
7%
6%
10%
7% 11%
5%
8%
5%
2014(n=307)
2016(n=303)
2014(n=300)
2016(n=300)
2014(n=311)
2016(n=300)
2014(n=304)
2016(n=303)
Mexico Brazil United States Canada
Risky Behavior Trends Over 2014 and 2016
Responded to emails or calls asking for bank detailsMade a note of your PIN and carried it with you or kept it with your cardUsed online banking or internet shopping without security software or on a public computerThrown papers or documents with account numbers (e.g., bank statements) in the trash binLeft smartphone unlocked when not using it
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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18
Figure9:RiskyBehaviorandFraudExperiencedintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
R EPLACEMENT CARDS Databreacheshavebecomederigueur,andissuersandmerchantscansafelyassumethatpaymentcarddetailsaswellasotherinformation,suchasPINs,emails,andaddresses,foranygivencustomerhavebeenbreached.Asaresultofsomebreaches,somecardissuersmailreplacementcardstotheircardholderseveniftherehasnotyetbeenfraudontheaccount,thoughmanyissuerstrytolimitcardreissuanceandpreferenhancedmonitoring.Thisreducescostsfortheissuersandinconvenienceforconsumers.
IntheAmericas,approximately53%ofAmericansreceivedareplacementcardduringthepastyear,alongwith46%ofMexicans,30%ofCanadians,and45%ofBrazilians.Giventhehugenumberofdatabreachesimpactingmanyretailers,itcanbedifficulttoidentifythesourceofthedatabreachandtracethefraudtoanygivenentity(Figure10).Itshouldbenotedthatconsumersmaynotrealizeexactlywhytheyhavereceivedanewcard.Sothereisapossibilitythatacardwasreissuedforfraudorpotentialfraudthattheconsumerwasn’tawareof;itisalsopossiblethatcardswerereissuedingeneralrotationorforEMVimplementation,buttheconsumercouldhavethoughtitwasfraud.
73%
51%
64%
42%
58%
46%
47%
40%
27%
49%
36%
58%
43%
54%
53%
60%
Did not engage inrisky behavior (n=180)
Engaged in risky behavior (n=117)
Did not engage inrisky behavior (n=106)
Engaged in risky behavior (n=171)
Did not engage inrisky behavior (n=160)
Engaged in risky behavior (n=133)
Did not engage inrisky behavior (n=124)
Engaged in risky behavior (n=154)
Can
ada
Braz
ilU
nite
d St
ates
Mex
ico
Fraud Experienced by Respondents Who Did and Did Not Participate in Risky Behavior in the Americas
Have not experienced card fraud Have experienced card fraud
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure10:ReplacementCardsintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
InMexico,replacementcardsarefarmorelikelytogotobackofwallet(getusedlessoften),with57%ofrespondentsmovingthecardbackwardinthewallet.Thereisacleardifferenceinwallet-positionbehaviorbetweentheU.S.andCanada,whichshowlowernumberschangingcards,andMexicoandBrazil,whichshowmuchhigherratesofdowngradingacard.Thismaybeduetogreaterstickinessassociatedwithcustomerloyaltyprogramsandmultipleproductrelationships(Figure11).
47%
54%
55%
70%
40%
36%
35%
24%
10%
8%
6%
5%
United States(n=293)
Mexico (n=278)
Brazil (n=277)
Canada (n=297)
Q. Has your financial institution sent a new debit, credit, or prepaid card to you during the past year because of a data breach or fraudulent
activity?
No Yes, once Yes, twice Yes, 3 times Yes, more than 3 times
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure11:UseofReplacementCardsintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Becomingavictimoffraudcanfeeljustasviolatingasahomeburglary,understandablyleavingconsumersemotional,confused,andasking“whydidthishappentome?”Consideringthisemotionalstate,financialinstitutionsmustfocusoncustomerservicetocalmcustomersandhelpthemthroughtherequiredpost-fraud“aftercare”process.Apositiveaftercareexperienceisahugecustomer-retentionopportunityandhelpsrebuildconfidencewithconsumers.Thisisespeciallycriticalsinceitiseasyforfraudspecialiststobecomeratherjaded,anditshouldbereinforcedasapartofregulartraining—thoseagentsmighthavetoactasmuchlikecounselorsascustomerserviceagents.
IntheAmericas,consumersintheU.S.arethemostpleasedwithtreatmentfromtheirinstitutionafterexperiencingfraud;90%ofconsumersaresomewhathappyorveryhappywiththetreatmenttheyexperienced.SecondisCanada,where81%ofconsumersareatleastsomewhathappywiththeirtreatment.Therehavebeensomeimprovementscomparedto2014withconsumersinMexicoandBrazil;80%inMexicoareatleastsomewhathappywiththeinstitution,and65%arethesameinBrazil(Figure12).Thereisplentyofopportunitytoimprove,especiallyinLatinAmerica,whereconsumerexperiencemarksarenotverystrong.
57%
42%
25%18%
Mexico (n=127) Brazil (n=125) Canada (n=88) United States (n=154)
Percentage of Respondents in the Americas Who Use Their Replacement Card Less as a Result of Fraud or a Breach
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure12:SatisfactionWithFinancialInstitutionAfterFraudintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Consumerswhoexperiencefraudandaredissatisfiedwiththeaftercareexperiencesometimeschangeproviders.CustomerdissatisfactionratesinMexicoandBrazilarerelativelyhigh,soitisnotsurprisingthat23%and18%ofconsumersinthoserespectivecountrieschangeprovidersafterafraudexperience.Thisisanimprovementover2014,when33%ofconsumersinBraziland21%ofconsumersinMexicoweredissatisfied.
IntheUnitedStates,6%ofconsumersswitchproviders,andinCanada,11%doso(Figure13).Thisisashiftfrom2014,whentheU.S.switchingratewas9%andtheCanadaswitchingratewas6%.TheratherlowU.S.andCanadianconsumerswitchingratescouldbeduetoparticularlystickyrelationshipswithfinancialinstitutions.Consumersmayhavemultipleproducts,suchasahomemortgage,401(k),orautoloan,withthesameinstitution,andcardloyaltyprogramsincentthemtoremainwiththeinstitutioneveniftheywerenotparticularlyhappywiththeaftercareexperience.
7%
9%
13%
9%
12%
11%
22%
31%
39%
43%
34%
59%
42%
37%
31%
United States(n=140)
Canada (n=105)
Mexico (n=159)
Brazil (n=137)
Q. How happy were you with the treatment from your financial institution when you experienced card fraud?
Very unhappy Somewhat unhappy Somewhat happy Very happy
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure13:SwitchingBehaviorintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Switchinginstitutionshasasignificantcostforconsumers,andsomemaychoosetouseadifferentcard(i.e.,front-of-walletcard)orusecashiftheirtrustdiminishesafterafraudeventratherthanchangefinancialinstitutionsoutright.Broadly,intheU.S.andCanada,consumersdonotexhibitastrongpreferenceforusinganalternatepaymentmethodfollowingafraudevent(Figure14).InBrazilandMexico,overhalfofconsumersreportatleastsomeback-of-walletbehavior.
Figure14:Back-of-WalletBehaviorintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
77%
82%
89%
94%
23%
18%
11%
6%
Mexico (n=159)
Brazil (n=137)
Canada (n=105)
United States(n=140)
Q. As a result of your experience with fraud, did you change your financial institution or credit card company?
No, I did not Yes, I did
4%
3%
3%
2%
31%
46%
56%
69%
51%
40%
33%
24%
14%
11%
8%
6%
Mexico (n=159)
Brazil (n=137)
Canada (n=105)
United States(n=140)
Q. When you experienced fraud, did you choose to use cash or an alternative payment method over a credit or debit card following the
card fraud incident?
Used cash instead ofmy debit card, but notinstead of my credit card
No Yes, but onlyin some situations
Yes, in allsituations
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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CONSUMER ATT ITUDES TOWARD FRAUD Fraudandsecurityhavebecomeamass-markettopic—storiesofcomputerhackers,malware,databreaches,fraudrings,andvictimsofidentitytheftareconstantlyinlocalandnationalnewsmedia.Itisunderstandablethatconsumersmightbeconcerned,especiallyasinstitutionsdon’twanttoshareallthecountermeasuresandcontrolstheyareusingtoavoidprovidingthecriminalsaniceplaybookfromwhichtowork.
IntheAmericas,consumersdonothaveabsoluteconfidencethattheirfinancialinstitutionscanprotectthem,butthemajoritybelievefinancialinstitutionsareatleastdoingthebesttheycan(Figure15).SomeinstitutionsintheAmericashavehighlightedsecurityinmarketingandbrandingmaterials,andappeartoseeapositiveeffectbycommunicatingtocustomerstheircommitmenttosecurity.
Figure15:ConsumerTrustinFinancialInstitutionsintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Inthecountrieswherefraudratesarehighest,consumersexpresshigherdegreesofconcern.Thisisonlylogicalgiventhatfraudexperiences,especiallymultipleexperiences,generallyleadtodiminishedtrust.
TheUnitedStatesisalargetargetwithrelativelyhighratesoffraud,yetconsumersexpresslessconcern,sinceU.S.consumersareprotectedbyfederalregulations(suchasRegulationE)andpaymentnetworkpoliciesthatrequirefinancialinstitutionstoreimbursethemwhentheyarevictimizedbyelectronicfraud.ConsumersinMexicoandBrazil,withhigherfraudratesandlessregulatorystructure,aremoreconcernedabouteverycategoryoffraudcomparedtoconsumersintheUnitedStatesandCanada.InBrazilandMexico,consumersaremostconcernedaboutidentitytheftandfraudontheirdebitcards.IntheUnitedStatesandCanada,consumersaremostconcernedaboutidentitytheft,databreachesthatresultincompromisedaccountnumbers,andfraudontheircreditcards(Figure16).
4%
8%
8%
13%
12%
67%
69%
60%
55%
24%
21%
26%
30%
United States(n=293)
Canada (n=297)
Brazil (n=277)
Mexico (n=278)
Q. Do you have confidence in your financial institution to protect you from card fraud?
No, I have verylittle confidencethey can
Not really,they coulddo more
Yes, to an extent,they're doingwhat they can
Yes,absoluteconfidence
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Ingeneral,strongconsumerprotectionsintheU.S.andCanadaappeartoreduceconsumers’concernoverfraudeventsbutcertainlydonotalleviateallconcerns.Theseregulationsandpoliciesalsocreateamoralhazard,sinceconsumershavelessofareasontoavoidriskybehaviors.
Figure16:Consumers’FraudConcernsintheAmericas
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
51%
50%
39%
36%
35%
28%
21%
31%
10%
83%
78%
77%
70%
76%
68%
60%
48%
39%
55%
48%
48%
41%
39%
33%
21%
33%
12%
74%
77%
73%
67%
62%
58%
55%
44%
40%
Identity theft
Data breach resulting in compromisedaccount numbers
Fraud on my credit card
Online banking fraud
Fraud on my debit card
Direct debit fraud (auto payment fromaccount)
Cheque/check fraud
Mobile wallets, or electronic purses suchas using PayPal on a phone, or using
Apple Pay, Google Pay, or making in-apppurchases
Fraud on my prepaid card
Percentage of Consumer Who Are Very Concerned About Fraud Types in the Americas
United States(n=300)Mexico (n=303)
Canada (n=303)
Brazil (n=300)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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25
FRAUDINEUROPE,THEMIDDLEEAST, ANDAFRICAManycountriesinEMEAhavewell-developedbankingsystems.Somehaveemergingeconomies,withconsumersgainingnewaccesstomanybankingproductsinrelativelyrecentyears.Manyoftheseeconomiesareskippingcardsforthemostpart(mostlyusedbythewealthyandtourists)andareleveragingalternative,frequentlymobile-basedpaymentoptions.Itissomewhatdifficulttocomparefinancialfraudacrosssuchdiverseeconomies,andthisreportbreaksouteurozonemembersfromtherestofEMEAtobettercomparetheregions.
R I SKY BEHAV IOR SimilartoconsumersintheAmericas,consumersinsurveyedEMEAcountriesarelargelyeducatedtoignoreemailsandcallsrequestingdetailsabouttheirbankaccounts,althoughconsumersintheUAEandSouthAfricarespondmorefrequently(Figure18).Likewise,consumersinmostcountriesnolongermakeanoteoftheirPINandcarryitwiththeircards;however,ItalianandUAEconsumerswritedowntheirPINsat19%and25%,respectively(Figure17andFigure18).Thisisaseriousflawinconsumereducationandapracticethatshouldbeaddressed.TheUAEhasparticularlyhighfiguresofriskybehaviors,whichlikelycontributetohigherfraudrates.
Figure17:RiskyBehaviorinEurozone
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
25%
16%
8%
3%
4%
15%
12%
12%
10%
4%
13%
14%
18%
19%
5%
21%
22%
8%
4%
3%
29%
26%
20%
9%
4%
Left smartphone unlockedwhen not using it
Thrown papers ordocuments with account
numbers (e.g., bankstatements) in the trash
bin
Used online banking orinternet shopping withoutsecurity software or on a
public computer
Made a note of your PINand carried it with you or
kept it with your card
Responded to emails orcalls asking for bank
details
Q. Which of the following have you done in the past 5 years?
France (n=304)
Germany (n=301)
Italy (n=304)
The Netherlands(n=300)Spain (n=303)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure18:RiskyBehaviorinEMEA(Non-Eurozone)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Overall,thereisstillplentyofriskybehaviorinallgeographies,andthesebehaviorscertainlyhavesomeimpactontheleveloffraud.Ineverycountrytherearehigherincidencesoffraudwhenconsumersparticipateinriskybehavior(Figure19andFigure20).Themagnitudeofdifferencebetweenriskyandnonriskyconsumersisquitesubstantial,andchangingthosebehaviorscanhavearealimpactonfraud.Consumereducationandwell-timedreminderscanslowlybutsurelyreducetheseriskybehaviors.
19%
16%
7%
8%
4%
27%
25%
26%
25%
19%
22%
30%
14%
7%
3%
28%
24%
18%
10%
10%
16%
13%
9%
8%
5%
Left smartphone unlockedwhen not using it
Thrown papers ordocuments with account
numbers (e.g., bankstatements) in the trash
bin
Used online banking orinternet shopping withoutsecurity software or on a
public computer
Made a note of your PINand carried it with you or
kept it with your card
Responded to emails orcalls asking for bank
details
Q. Which of the following have you done in the past 5 years?
United Kingdom
UAE (n=300)
Sweden (n=302)
South Africa(n=303)Hungary (n=303)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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27
Figure19:RiskyBehaviorandFraudExperiencedinEurozone
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
77%
61%
84%
62%
84%
65%
87%
75%
92%
78%
23%
39%
16%
38%
16%
35%
13%
25%
8%
22%
Did not engage in risky behavior (n=162)
Engaged in riskybehavior (n=127)
Did not engage in risky behavior (n=149)
Engaged in riskybehavior (n=145)
Did not engage in risky behavior (n=122)
Engaged in riskybehavior (n=168)
Did not engage in risky behavior (n=175)
Engaged in riskybehavior (n=121)
Did not engage in risky behavior (n=172)
Engaged in riskybehavior (n=125)
Fran
ceIta
lySp
ain
Ger
man
yTh
eN
ethe
rland
s
Fraud Experienced by Respondents Who Did and Did Not Participate in Risky Behavior in the EMEA
Have not experienced card fraud Have experienced card fraud
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure20:RiskyBehaviorandFraudExperiencedinEMEA(Non-Eurozone)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
R EPLACEMENT CARDS AcrossalltheEMEAcountriessurveyed,therateatwhichconsumersreceivedareplacementcardduetofraudordatabreachesduringthepastyearrangesfrom10%inHungary(wherefraudislow)to29%intheUAE(oneofthecountrieswiththehighestfraudratesinthestudy).Asmallbutsubstantialnumberofconsumersreceivedmorethanonereplacementcardduringthepastyear(Figure21andFigure22).
71%
64%
73%
67%
86%
69%
90%
82%
92%
88%
29%
36%
27%
33%
14%
31%
10%
18%
8%
12%
Did not engage in risky behavior (n=133)
Engaged in riskybehavior (n=162)
Did not engage in risky behavior (n=183)
Engaged in riskybehavior (n=112)
Did not engage in risky behavior (n=66)
Engaged in riskybehavior (n=213)
Did not engage in risky behavior (n=139)
Engaged in riskybehavior (n=157)
Did not engage in risky behavior (n=171)
Engaged in riskybehavior (n=133)
Sout
h Af
rica
Uni
ted
King
dom
UAE
Swed
enH
unga
ryFraud Experienced by Respondents Who Did and Did Not Participate in Risky
Behavior in the EMEA
Have not experienced card fraud Have experienced card fraud
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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29
Figure21:ReplacementCardsinEurozone
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure22:ReplacementCardsinEMEA(Non-Eurozone)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Replacementcardsarenotabadthinginandofthemselves.Someconsumersappreciateaproactiveapproachfollowingadatabreachoridentifiedskimmingincident.Othersmayfindthisannoyingiftheyneedtoupdaterecurringbillinginformation.Itisverycriticalthatinstitutionsprovideveryclearinformationincasesofbreachorskimmingevents.Manyissuersareoptingtomorecloselymonitoraccountsthatmaybeinvolvedinabreachorskimmingeventratherthanreissuecards.Thiscanreducecostsforissuersandreduceinconvenienceforconsumers.
76%
78%
78%
83%
88%
21%
18%
19%
15%
9%
Spain (n=290)
France (n=289)
Germany (n=296)
Italy (n=294)
The Netherlands(n=297)
Q. Has your financial institution sent a new debit, credit, or prepaid card to you during the past year because of a data breach or fraudulent
activity?
No Yes, once Yes, twice Yes, 3 times
71%
78%
81%
87%
90%
22%
20%
15%
11%
8%
5%UAE (n=279)
United Kingdom(n=295)
South Africa(n=295)
Sweden (n=296)
Hungary (n=284)
Q. Has your financial institution sent a new debit, credit, or prepaid card to you during the past year because of a data breach or fraudulent
activity?
No Yes, once Yes, twice Yes, 3 times
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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AcrosstheEMEAcountries,consumersusereplacementcardslessthanthecardstheyreplacedatratesrangingfrom25%inGermanyto51%intheUAE.Thesehighratesofback-of-walletbehaviorreducecardissuers’revenueanddemonstratediminishingtrustinthecardsorfinancialinstitutionsinvolved(Figure23).
Figure23:UseofReplacementCardsinEMEA
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Afterexperiencingfraud,atleast50%ofconsumerswereatleastsomewhathappyacrossalleightcountriessurveyed.FranceandtheU.K.sawsomeofthemostsatisfiedconsumers,with80%atleastsomewhatsatisfiedinbothcountries.Others,suchasSpain,Italy,Hungary,SouthAfrica,andtheUAE,hadsignificantpopulationsthatwereatleastsomewhatunhappy(Figure24andFigure25).
51%47%
44% 43% 41%35% 33% 33% 32%
25%
UAE (n=81) Italy (n=49) Spain(n=71)
TheNetherlands
(n=35)
SouthAfrica(n=56)
France(n=63)
UnitedKingdom(n=66)
Sweden(n=39)
Hungary(n=28)
Germany(n=64)
Percentage of Respondents in the EMEA Who Use Their Replacement Card Less as a Result of Fraud or a Breach
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure24:SatisfactionWithFinancialInstitutionAfterFraudinEurozone
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure25:SatisfactionWithFinancialInstitutionAfterFraudinEMEA(Non-Eurozone)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Eventhoughsomanyconsumersareatleastsomewhatunhappywiththeirtreatmentsubsequenttoexperiencingfraud,relativelyfewconsumersreportthattheyswitchedfinancialinstitutions.TheUAEisastandoutwitha30%switchingrate(Figure26).Whiletheseratesmayseemrelativelylow,financialinstitutionsarecompetingforcustomers,anditismoreexpensivetoacquireacustomerthanitistokeepone;retainingcustomersresultsinbothretainingrevenueanddecreasingcosts.Hungary’srelativelylowsatisfactionratesdonottranslatetohigherswitchingnumbers.Itisnotclearwhatreasonscontributetothishighdegreeofloyalty.
7%
17%
3%
13%
13%
17%
8%
17%
20%
19%
27%
36%
41%
35%
47%
49%
40%
39%
32%
22%
The Netherlands(n=41)
Germany (n=53)
France (n=88)
Spain (n=79)
Italy (n=79)
Q. How happy were you with the treatment from your financial institution when you experienced card fraud?
Very unhappy Somewhat unhappy Somewhat happy Very happy
9%
5%
11%
14%
9%
10%
19%
22%
16%
25%
21%
19%
19%
24%
50%
59%
57%
48%
45%
16%
United Kingdom(n=86)
Sweden (n=42)
Hungary (n=27)
South Africa(n=98)
UAE (n=76)
Q. How happy were you with the treatment from your financial institution when you experienced card fraud?
Very unhappy Somewhat unhappy Somewhat happy Very happy
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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32
Figure26:SwitchingBehaviorinEMEA
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Notallunhappyconsumersswitchfinancialinstitutionsafterexperiencingfraud,buttheycanstillnegativelyimpacttheirfinancialinstitution’srevenuebyusingtheircardlessoften.Itcanbecomea“let’sjustbefriends”typeofrelationship.Inmanycases,thereisachangeinwalletpositiononlyincertainsituations(Figure27andFigure28).Whilenotincludedinthesurveyquestions,anecdotalevidencesuggestsconsumerswilloftenchooseanalternativecardforonlinepurchasesandaseparateoneforPOSones.Thisquiterightlyispresentedtoconsumersasabestpracticetosegmentfordifferenttypesofriskinstorescomparedtoonline.
70%
82%
82%
83%
83%
84%
87%
90%
90%
93%
30%
18%
18%
17%
17%
16%
13%
10%
10%
7%
UAE (n=76)
Italy (n=79)
Spain (n=79)
United Kingdom(n=86)
Sweden (n=42)
South Africa(n=98)
Germany (n=53)
France (n=88)
The Netherlands(n=41)
Hungary (n=27)
Q. As a result of your experience with fraud, did you change your financial institution or credit card company?
No, I did not Yes, I did
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure27:Back-of-WalletBehaviorinEurozone
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure28:Back-of-WalletBehaviorinEMEA(Non-Eurozone)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
CONSUMER ATT ITUDES TOWARD FRAUD Lessthanone-thirdofconsumersacrossEMEAhaveabsoluteconfidencethattheirfinancialinstitutioncanprotectthemfromfraud,thoughinallcountriesatleast60%believetheinstitutionsaredoingwhattheycantoprotectthem.Sweden,SouthAfrica,andtheNetherlandshavesomeofthelowestratesofconfidence(Figure29andFigure30).
3%
4%
2%
41%
46%
49%
54%
65%
46%
49%
32%
32%
33%
11%
5%
15%
12%
2%
Italy (n=79)
Spain (n=79)
Germany (n=53)
The Netherlands(n=41)
France (n=88)
Q. When you experienced fraud, did you choose to use cash or an alternative payment method over a credit or debit card following the card
fraud incident?
Used cash insteadof my debit card,but not insteadof my credit card
No Yes, but onlyin some situations
Yes, in allsituations
3%
2%
4%
4%
5%
21%
38%
48%
55%
64%
58%
45%
48%
32%
24%
18%
14%
9%
7%
UAE (n=76)
Sweden (n=42)
Hungary (n=27)
South Africa(n=98)
United Kingdom(n=86)
Q. When you experienced fraud, did you choose to use cash or an alternative payment method over a credit or debit card following the card
fraud incident?
Used cash insteadof my debit card,but not insteadof my credit card
No Yes, but onlyin some situations
Yes, in allsituations
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure29:Consumers’TrustinFinancialInstitutionsinEurozone
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure30:Consumers’TrustinFinancialInstitutionsinEMEA(Non-Eurozone)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Consumersareunderstandablyconcernedaboutawiderangeoffinancialfraudtypes.Themajorityofconsumersareveryconcernedaboutidentitytheft,databreachesresultingincompromisedaccountnumbers,onlinebankingfraud,andfraudoncreditanddebitcards.ManyconsumersinEMEAarenotveryconcernedwithcheckfraud,aschecksaregenerallyutilizedlessthaninNorthAmericaandsomeothercountries.Thereiscertainlyafairbitofconcernaboutthemobilechannel;asmoreoptionsbecomeavailableandmoreconsumersusemobilepayments,thesenumbersarelikelytorise(Figure31andFigure32).
6%
11%
10%
15%
16%
19%
65%
59%
66%
53%
68%
21%
25%
17%
28%
11%
Germany (n=296)
Spain (n=290)
France (n=289)
Italy (n=294)
The Netherlands(n=297)
Q. Do you have confidence in your financial institution to protect you from card fraud?
No, I have verylittle confidencethey can
Not really,they coulddo more
Yes, to an extent,they're doingwhat they can
Yes,absoluteconfidence
5%
2%
3%
4%
9%
5%
9%
10%
12%
16%
51%
69%
54%
58%
59%
39%
20%
33%
27%
16%
Hungary (n=294)
United Kingdom(n=295)
UAE (n=279)
South Africa(n=295)
Sweden (n=296)
Q. Do you have confidence in your financial institution to protect you from card fraud?
No, I have verylittle confidencethey can
Not really,they coulddo more
Yes, to an extent,they're doingwhat they can
Yes,absoluteconfidence
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure31:Consumers’FraudConcernsinEurozone
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
67%
63%
53%
63%
56%
47%
35%
35%
22%
35%
35%
35%
29%
19%
25%
31%
24%
14%
55%
54%
44%
48%
40%
45%
25%
36%
35%
24%
26%
23%
14%
16%
17%
6%
18%
9%
75%
70%
65%
65%
65%
60%
47%
29%
34%
Identity theft
Data breach resulting in compromisedaccount numbers
Online banking fraud
Fraud on my credit card
Fraud on my debit card
Direct debit fraud (auto payment fromaccount)
Cheque/check fraud
Mobile wallets, or electronic pursessuch as using PayPal on a phone, or
using Apple Pay, Google Pay, ormaking in-app purchases
Fraud on my prepaid card
Percentage of Consumers Who Are Very Concerned About Fraud Types in EMEA
France (n=304)
Germany (n=301)
Italy (n=304)
The Netherlands(n=300)Spain (n=303)
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Figure32:Consumers’FraudConcernsinEMEA(Non-Eurozone)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
43%
42%
39%
38%
33%
34%
25%
16%
11%
31%
26%
21%
24%
23%
16%
12%
5%
13%
70%
66%
65%
59%
59%
64%
40%
39%
26%
80%
76%
68%
62%
81%
60%
70%
42%
56%
60%
62%
62%
62%
57%
55%
49%
48%
46%
Identity theft
Data breach resulting in compromised account numbers
Online banking fraud
Fraud on my debit card
Fraud on my credit card
Direct debit fraud (auto payment from account)
Mobile wallets, or electronic purses such as using PayPal on a phone, or using ApplePay,
Google Pay, or making in app purchases
Cheque/check fraud
Fraud on my prepaid card
Percentage of Consumer Who Are "Very Concerned" about Fraud Types in EMEA
UK (n=300)Sweden (n=302)South Africa (n=303)Hungary (n=303)UAE (n=300)
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FRAUDINTHEASIA-PACIFICThefinalregioncoveredbytheconsumerfraudstudyistheAsia-Pacific,withsixcountriesincludedin2016.ConsumerbehaviorandattitudesinthisregionaresomewhatdifferentthaninEMEAandtheAmericas.
R I SKY BEHAV IOR ConsumerbehaviorinAustraliaandNewZealandtendstobefarlessriskythanintherestoftheAsia-Pacific.Thismaybeattributabletorelativelymorematurecardpaymentsmarketsandfraudcontrols.Thefaster-growingandmaturingmarkets,suchasThailand,Indonesia,andIndia,tendtoshowgreaterlevelsofriskybehavior.
TheverylowpercentagesofAustralianandNewZealandconsumerswhocarrytheirPINwithacardorrespondtoemailsandcallsaskingforbankaccountinformationmorecloselyresembleconsumersintheAmericasandEMEAthaninotherAsia-Pacificcountries.Largepercentagesofconsumersinallcountriesleavesmartphonesunlockedwhennotinuseandthrowdocumentswithbankaccountnumbersinthebin.
Thepatterntendstoholdthatfast-growingThailand,India,andIndonesiaexhibitsomeofthehighest-riskbehaviors.Muchofthismightbeattributedtolessconsumereducationandexperiencewithpaymentcards.InallcountriesexceptAustraliaandNewZealand,over20%ofconsumersbankorshoponlineoncomputerswithoutsecuritysoftwareoronpubliccomputers(Figure33).Inanumberofcountries—again,thosegrowingquickly—consumersgenerallydonothavestrongbroadbandconnectionsathome,andmanyconsumersrelyoninternetcafeswhenactivescannotbecompletedonamobiledevice.Forexample,internetcafesareverypopularinThailandamonglocalsandtourists,andsomeneighborhoodsseemtohaveoneoneverycorner.
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Figure33:RiskyBehaviorintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
TheAsia-Pacificdoesnotshowcleartrendsforgrowthordeclineinriskybehaviors.Itisclearthatmorematuremarkets,suchasNewZealandandAustralia,demonstratelowerincidenceofriskybehavior.2016ratesarerelativelysimilarto2014ones,however.Thisimpliesanopportunityforconsumereducationspecificallyfocusedonhowcustomers’behavioraffectsthepotentialforfraud(Figure34).
23%
15%
11%
5%
7%
35%
24%
19%
10%
12%
22%
34%
30%
20%
19%
34%
31%
29%
19%
21%
28%
26%
10%
3%
4%
30%
36%
43%
25%
19%
Thrown papers ordocuments with account
numbers (e.g., bankstatements) in the trash bin
Left smartphone unlockedwhen not using it
Used online banking orinternet shopping withoutsecurity software or on a
public computer
Responded to emails orcalls asking for bank
details
Made a note of your PINand carried it with you or
kept it with your card
Q. Which of the following have you done in the past 5 years?
Australia (n=300)
Singapore (n=303)
India (n=300)
Indonesia (n=300)
New Zealand (n=301)
Thailand (n=300)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure34:RiskyBehaviorTrendsintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
IneverycountryoftheAsia-Pacificregion,riskybehaviorandexperiencingfraudclearlycorrelate.ThisismostclearinIndia,Thailand,andIndonesia.Again,educatingconsumersaboutriskybehaviorsandtheneedtoavoidthemaswellasalternativebehaviors(suchasLinuxinstallationsthatcanrunoffaUSBkey)canhelpreducefraudincidentsandhelpconsumersfeelsomeelementofconfidenceintheirabilitytoprotectthemselvesfromfraud(Figure35).
25% 19% 15% 21% 14% 12% 4% 4% 6% 7% 19%
28%22% 37% 34% 37% 35%
32% 28% 23% 23%30%
31%30%
27% 29%24%
19%13% 10% 8% 11%
43%
22%20% 16%
19%14%
10%
5%
25%
29%34% 28%
31%32%
24%
20% 26%21% 15%
36%
2014(n=310)
2016(n=300)
2014(n=330)
2016(n=300)
2014(n=311)
2016(n=303)
2014(n=310)
2016(n=301)
2014(n=310)
2016(n=300)
2016(n=300)
India Indonesia Singapore New Zealand Australia Thailand
Risky Behavior Trends Over 2014 and 2016
Left smartphone unlocked when not using itResponded to emails or calls asking for bank detailsUsed online banking or internet shopping without security software or on a public computerThrown papers or documents with account numbers (e.g., bank statements) in the trash binMade a note of your PIN and carried it with you or kept it with your card
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure35:RiskyBehaviorandFraudExperiencedintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
R EPLACEMENT CARDS IntheAsia-Pacificregion,consumerswhoreceivedatleastonereplacementcardrangefromalowof14%inThailandtoalmost34%inSingapore.ThismaybeareflectionoftargetedfraudattacksanddatabreachespointedtomoreaffluentregionssuchasSingapore,India,Australia,andNewZealand.Asinotherregions,someconsumersreceivedmultiplereplacementcardsduringthepastyear(Figure36).
64%
54%
65%
62%
82%
55%
89%
69%
85%
75%
91%
73%
36%
46%
35%
38%
18%
45%
11%
31%
15%
25%
9%
27%
Did not engage in riskybehavior (n=170)
Engaged in riskybehavior (n=125)
Did not engage in riskybehavior (n=100)
Engaged in riskybehavior (n=191)
Did not engage in riskybehavior (n=78)
Engaged in riskybehavior (n=204)
Did not engage in riskybehavior (n=55)
Engaged in riskybehavior (n=213)
Did not engage in riskybehavior (n=142)
Engaged in riskybehavior(n=153)
Did not engage in riskybehavior (n=54)
Engaged in riskybehavior (n=210)
Aust
ralia
Sing
apor
eIn
dia
Indo
nesi
aN
ewZe
alan
dTh
aila
ndFraud Experienced by Respondents Who Did and Did Not Participate in Risky
Behavior in the Asia-Pacific
Have not experienced card fraud Have experienced card fraud
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure36:ReplacementCardsintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
ManyconsumersacrosstheAsia-Pacificregionusedreplacementcardslessthantheoriginalcards.Thisback-of-walletbehavioroccurredatveryhighratescomparedtootherregions—from31%inAustraliato74%inThailand.Thisbehaviorrepresentslostrevenueforfinancialinstitutionsandsurelyshowsconsumers’lackofconfidenceaswellasanincreasingvarietyofnoncard-basedpaymentoptionsavailabletoconsumers(Figure37).
Figure37:UseofReplacementCardsintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
86%
85%
79%
72%
69%
66%
13%
14%
17%
21%
24%
26%
6%
4%
7%
Thailand (n=264)
New Zealand(n=295)
Indonesia (n=268)
Australia (n=295)
India (n=282)
Singapore (n=291)
Q. Has your financial institution sent a new debit, credit, or prepaid card to you during the past year because of a data breach or fraudulent
activity?
No Yes, once Yes, twice Yes, 3 times Yes, more than 3 times
74%
62%58%
36% 36%31%
Thailand (n=38) India (n=87) Indonesia(n=55)
Singapore(n=98)
New Zealand(n=45)
Australia (n=84)
Percentage of Respondents in the Asia-Pacific Who Use Their Replacement Card Less as a Result of Fraud or a Breach
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Consumersatisfactionrateswithfinancialinstitutions’aftercareexperiencevarydramaticallybycountry.InAustralia,85%ofconsumerswereatleastsomewhathappyafterafraudexperience,andinNewZealand,77%wereatleastsomewhathappy.Intheothercountries,highpercentagesofconsumerswereunhappyaftertheirfraudexperience:40%wereatleastsomewhatunhappyinSingapore(increasedfrom33%in2014),48%inIndia,and42%inIndonesia(Figure38).Inmanycases,customeraftercareisstillevolving,asisthesophisticationofcardfraudmonitoringinthegrowingeconomies.ThisisagainclearcomparedtothemorematuremarketsinAustraliaandNewZealand.
Figure38:SatisfactionWithFinancialInstitutionAfterFraudintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Comparedtootherregions,theAsia-Pacific’sswitchingratesareratherhigh.InThailand,India,andIndonesia,between44%and48%ofconsumersswitchfinancialinstitutionsaftertheirfraudexperience.Theseveryhighratesofcustomerattritionareverycostlytofinancialinstitutions.InSingapore,21%ofconsumersswitchfinancialinstitutionsafterexperiencingfraud,muchgreaterthaninAustraliaandNewZealand.Thisistroubling,asSingaporeisawealthycountrywithwell-establishedglobalbanks,regulations,andtechnologytools.
AustraliaandNewZealandhavethelowestratesofswitchingbehavior,at13%and8%,respectively,whichismuchmoresimilartoNorthAmericaandWesternEuropethanotherpartsoftheAsia-Pacific(Figure39).MuchlikeintheAmericas,theremaybemorestickinesswithconsumersinAustraliaandNewZealandduetomorein-depthrelationshipsviamultipleproducts,whereasconsumersinthegrowingeconomiesmayhavemorewillingnesstoswitchandarelesscloselytiedtoagiveninstitution.ThereisanopportunityinThailand,India,andIndonesiatocreatestickiermultiproductrelationshipsandloyaltyprograms.
17%
20%
18%
13%
11%
10%
7%
28%
24%
27%
26%
33%
37%
36%
44%
48%
55%
52%
40%
16%
14%
12%
8%
Australia (n=119)
New Zealand(n=60)
India (n=106)
Indonesia (n=71)
Singapore (n=107)
Thailand (n=62)
Q. How happy were you with the treatment from your financial institution when you experienced card fraud?
Very unhappy Somewhat unhappy Somewhat happy Very happy
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure39:SwitchingBehaviorintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Somewhatsurprisingly,countrieswithhigherfraudratesandlowerlevelsofcustomeraftercaredonotshowparticularlyhighratesofmovingcardstobackofwallet.Indonesia,Thailand,andIndiashowlargeproportionsofconsumerswhoonlychangewalletpositionbehaviorinsomesituations(Figure40).
Figure40:Back-of-WalletBehaviorintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
52%
52%
56%
79%
87%
92%
48%
48%
44%
21%
13%
8%
Thailand (n=62)
India (n=106)
Indonesia (n=71)
Singapore (n=107)
Australia (n=119)
New Zealand(n=60)
Q. As a result of your experience with fraud, did you change your financial institution or credit card company?
No, I did not Yes, I did
4%
10%
2%
3%
3%
14%
18%
13%
49%
54%
68%
69%
58%
56%
38%
31%
23%
13%
23%
21%
11%
12%
5%
Indonesia (n=71)
India (n=106)
Thailand (n=62)
Singapore (n=107)
Australia (n=119)
New Zealand(n=60)
Q. When you experienced fraud, did you choose to use cash or an alternative payment method over a credit or debit card following the card
fraud incident?
Used cash insteadof my debit card,but not insteadof my credit card
No Yes, but onlyin some situations
Yes, in allsituations
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CONSUMER ATT ITUDES TOWARD FRAUD Muchlikeotherregions,theAsia-Pacificenjoysastrongconsumersentimentthatfinancialinstitutionsareatleastdoingthebesttheycantopreventfraud(Figure41).SingaporeandThailandhavethelowestlevelsofconfidence,witheachshowinga15%unfavorableview.Asinothergeographies,marketinganddemonstratingtocustomersthecontrolsandtechnologiesthatareinplacecanimprovecustomersatisfaction.
Figure41:Consumers’TrustinFinancialInstitutionsintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Acrossallcountries,consumersintheAsia-Pacificaremostconcernedaboutidentitytheft,databreachesresultingincompromisedaccountnumbers,andonlinebankingfraud(Figure42).Singaporestandsoutasmostconcernedinnearlyeverycategory,whichreflectstheseconsumers’relativelylowconfidencethatinstitutionsareprotectingthemcomparedtotheconfidenceofconsumersinothercountries.CheckfraudismuchmoreofaconcerninIndia,Singapore,andIndonesiathaninmostofEMEA,aschecksaremorecommonlyusedintheAsia-PacificcomparedtomostofEMEA.
3%
6%
7%
7%
9%
13%
13%
49%
70%
64%
59%
60%
71%
45%
22%
27%
29%
25%
14%
India (n=282)
New Zealand(n=295)
Australia (n=295)
Indonesia (n=268)
Thailand (n=264)
Singapore (n=291)
Q. Do you have confidence in your financial institution to protect you from card fraud?
No, I have verylittle confidencethey can
Not really,they coulddo more
Yes, to an extent,they're doingwhat they can
Yes,absoluteconfidence
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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Figure42:Consumers’FraudConcernsintheAsia-Pacific
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
50%
47%
43%
37%
33%
30%
30%
15%
16%
72%
69%
71%
68%
58%
62%
58%
40%
35%
62%
65%
66%
58%
64%
62%
46%
56%
47%
75%
73%
65%
65%
65%
61%
45%
49%
54%
38%
35%
34%
32%
24%
26%
31%
13%
13%
53%
38%
47%
45%
44%
37%
34%
27%
28%
Data breach resulting in compromised account numbers
Identity theft
Online banking fraud
Fraud on my credit card
Fraud on my debit card
Direct debit fraud (auto payment from account)
Mobile wallets, or electronic purses such as using PayPal on a phone, or using ApplePay,
Google Pay, or making in app purchases
Cheque/check fraud
Fraud on my prepaid card
Percentage of Consumer Who Are "Very Concerned" about Fraud Types in The Asia-Pacific
Australia (n=295)Singapore (n=291)India (n=282)Indonesia (n=268)New Zealand (n=295)Thailand (n=264)
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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RECOMMENDATIONSWhenconsumersarenotengagedinthefraud-preventionprocessandunawareofhowtheirbehaviorsputthematrisk,financialinstitutionsandconsumerssuffer.Thereisgreatmutualbenefitincreatingapartnershipwithconsumersbyprovidingeducationtoreducetheriskoffraudinthefirstplace,thenhavingstrongaftercareprocesseswhenafrauddoesoccur.Doingsocanbothreducecostsandpreserverevenue.
Atthesametime,inthecaseofdatabreachesorskimming,thereislittleifanythingtheinstitutionorconsumercando.Helpingconsumersunderstandthattheseeventsarenotalwaystheinstitution’sfaultandcommunicatingclearlywhatactionsarebeingtakencangoalongwaytowardimprovingconsumerconfidence.
Forfinancialinstitutions:
• Customereducationandparticipation:Thiscancomeinmanyforms,suchasonthewebsiteormobileapp,asapartofemailnotifications,community“shredit”days,andthroughtheaftercareprocess.Ensuretheyhaveabasicunderstandingofhowtheinstitutioniskeepingthemsafe,too.
• Offerexamplecases:Manyconsumersdorealizesomeoftheirbehaviorsareriskyanddon’tnecessarilyknowwhatalternativesareavailabletothem.Oneapproachistocreateashortstoryexplainingtheriskybehavior,thepotentialforfraud,andalternativeactions.Thiscanbringthemessagehometoconsumers.Forexample,consumerswhoneedtouseinternetcafesorotherinsecureconnectionscanbeinstructedonhowtouseaUSB-basedLinuxinstancetorunmoresecuresessions.AnotherexampleishelpinguserscreateamnemonictohelprememberPINsandpasswords.
• Communicateclearlyandsimply:Ensureconsumersunderstandthereasonforareplacementcard,thatitissafetouse,andwhyitissafetouse.Makefraudprotectioneffortseasytounderstandandeasilyavailable,withoutexposingtoomuchinformationtofraudsters.Explainclearlywhythecardwasreissued—becauseoffraud,toreplacestripewithchip,oraspartofthegeneralexpirycycle.
• Focusoncustomerexperience:Afterexperiencingfraud,consumersareoftenemotional.Trainagentstobeempatheticandhelpfultothegreatestextentpossibletoretainvictimizedcustomers.Remindagentsthatwhiletheyworkonfraudcaseseveryday,thecustomerontheotherenddoesn’thavethatexperience.
• Focusonlayersofsecurity:Thereisno“silverbullet”solution,butconsiderhowtoolslike3-DSecure,transactionmonitoring,andbiometricauthenticationcouldenhancebothsecurityandcustomerservice.
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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RELATEDAITEGROUPRESEARCHCombatingFraud:ConsumerPreferences,January2016.
NotYourFather’s3-DSecure:AddressingtheRisingTideofCNPFraud,February2016.
EMV:IssuanceTrajectoryandImpactonAccountTakeoverandCNP,May2016.
Digital-ChannelFraudMitigation:TheMobileForceAwakens,June2015.
PaymentCards:CurrentThreatsandProtections,September2014.
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom July2016
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ABOUTAITEGROUPAiteGroupisaglobalresearchandadvisoryfirmdeliveringcomprehensive,actionableadviceonbusiness,technology,andregulatoryissuesandtheirimpactonthefinancialservicesindustry.Withexpertiseinbanking,payments,insurance,wealthmanagement,andthecapitalmarkets,weguidefinancialinstitutions,technologyproviders,andconsultingfirmsworldwide.Wepartnerwithourclients,revealingtheirblindspotsanddeliveringinsightstomaketheirbusinessessmarterandstronger.VisitusonthewebandconnectwithusonTwitterandLinkedIn.
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