German consumers expect greater protection from their banks in the face of increasing real-time payments (RTP) and growing fraud activity

Highlights

• Additional security checks: Half of consumers want more protection mechanisms for bank transactions - a clear signal to banks to strengthen their security processes.
• Willingness to switch banks: Two out of five customers would switch banks if fraud cases were not resolved transparently, emphasising the importance of transparency and fast problem resolution for customer loyalty.
• Concerns about real-time payments: One in four customers think current security measures for real-time payments are inadequate, highlighting the need for banks to take action to boost trust.

BERLIN: A new survey from global analytics software leader FICO shows that German consumers expect greater protection from their banks in the face of increasing real-time payments (RTP) and growing fraud activity. As digitalisation progresses, they are demanding effective fraud detection, fast communication and targeted alerts to feel safer from online fraud.

More information: https://www.fico.com/de/latest-thinking/ebook/2024-scams-impact-survey-germany-german

Real-time payments on the rise - security concerns remain

Real-time payments are gaining popularity in Germany, but security concerns remain pronounced. According to the survey, 83 per cent of German consumers have already carried out RTP transactions, but only 17 per cent plan to use them more frequently in the next 12 months - a decrease of 8 per cent compared to the previous year. Only 28 per cent of respondents consider RTP to be more secure than credit card payments, compared to a global average of 51 per cent. This shows that while German consumers appreciate the benefits of RTP, they still have security concerns.

Consumers demand stronger protection from banks

With increasing fraud and the growing threat of fraudulent transactions, expectations of banks are rising. Almost two-thirds of respondents (63 per cent) said they had received a text, email, or phone call they believe was part of a scam in the past year, an increase of 12 per cent compared to 2023. 27 per cent of respondents reported that people close to them had also been affected by fraud. In addition, 13 per cent of respondents reported financial losses due to payments for products or services that were never delivered - an increase on the previous year.

In view of these developments, consumers believe that banks have a duty to take more comprehensive protective measures. For example, 43 per cent of respondents cite improved fraud detection systems to prevent fraud as the top action a bank should take to protect them from scams. A further 15 per cent would like to see more frequent warnings about known or emerging fraud scams, a specific ‘waiting period’ for large transfers or the active rejection of high-risk transactions.

Responsibility for losses: consumers expect compensation

Consumers also expect clear compensation rules from banks for fraud losses. 65 per cent of respondents believe that banks should compensate fraud victims - either always (33 per cent) or at least frequently (32 per cent). At the same time, Germans also perceive personal responsibility in this regard: 61 per cent state that they would be responsible for their own security if they were to fall victim to fraud. Nevertheless, 14 per cent also see the sending bank as responsible and 13 per cent see the receiving bank as responsible.

“Our survey results show that German consumers have developed a strong awareness of fraud risks and expect comprehensive protective measures from their bank,” says Jens Dauner, vice president and managing director for DACH & Continental Europe at FICO. “Banks can only fulfil these expectations if they use modern, AI-based systems for fraud detection and real-time communication to secure consumer trust.”

Dissatisfaction with fraud management leads to customer churn

For banks in Germany, customer satisfaction will be increasingly crucial in the fight against fraud. Around 75 per cent of respondents are satisfied with the way their bank handles fraud cases. However, the survey shows that the willingness to change banks increases if the service is inadequate: 11 per cent of consumers would change banks if their concerns were not dealt with satisfactorily. In addition, 60 per cent would complain to their bank and 15 per cent would even inform authorities or regulatory bodies.

Channel preferences for fraud alerts - banks must react flexibly

The survey results make it clear that consumers expect flexible communication when it comes to fraud alerts. A growing number (37 per cent) prefer notifications via the banking app, followed by 23 per cent by phone call and 18 per cent by text message.

“Consumer’s communication preferences vary, and banks need to recognize and respond to this,” said Dauner. “They need to reach their customers in real time and via their preferred channels in order to be able to intervene in good time in the event of an emergency. Only in this way can they not only increase customer satisfaction, but also prevent customer churn due to inadequate fraud prevention.”

Methodology

The data referenced here derives from two surveys FICO conducted in 2023 and 2024. Each survey asked more than 12,000 consumers across 14 countries, including 1,000 from Germany, their opinions and experiences regarding RTP usage, scams, and their banks’ scam management capabilities. When year-over-year comparisons are made, they are referring to a comparison of these two surveys that asked the same question in each year the survey was conducted.

About FICO

FICO (NYSE: FICO) powers decisions that help people and businesses around the world prosper. Founded in 1956, the company is a pioneer in the use of predictive analytics and data science to improve operational decisions. FICO holds more than 200 US and foreign patents on technologies that increase profitability, customer satisfaction and growth for businesses in financial services, insurance, telecommunications, health care, retail and many other industries. Using FICO solutions, businesses in more than 80 countries do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency. The FICO® Score, used by 90% of top US lenders, is the standard measure of consumer credit risk in the US and has been made available in over 40 other countries, improving risk management, credit access and transparency.

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Fonte: Business Wire