UK Consumers Will Choose Banks Based on Fraud Protection: FICO

BusinessWireDecember 5, 20227 min

FICO’s latest survey into fraud and identity verification shows consumers rank fraud protection as number one consideration when choosing a new financial account provider and they’re now on board with the latest identity verification methods


  • 30 percent of respondents selected good fraud prevention as their number one consideration when choosing a new provider
  • 25 percent said they had stopped opening a new personal account as the identity checks were too difficult or time-consuming

Global analytics software company FICO has revealed the findings from its latest fraud surveyi with consumers showing that strong fraud protection can be a competitive differentiator. When asked to rank their considerations in selecting a financial account provider, the top factor for 30 percent was good fraud prevention. This came above value for money at 26 percent.

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Greater levels of checks across the financial services sector in the past year are probably contributing to consumers seeing fraud prevention as important. Some 63 percent of respondents in the UK reported an increase in identity checks when purchasing online with a card and 52 percent saw a rise in the number of checks carried out when logging in to their bank accounts.

“Historically there has been a perception that fraud teams are an overhead, a necessity to cut fraud losses,” said Matt Cox, vice president and managing director for FICO in EMEA. “But successful fraud protection can actually increase competitive differentiation. Consumer awareness of scams and the methods used by financial institutions to prevent fraud is rising and with that comes an increased interest in a financial service provider’s fraud credentials.”

Biometrics take the lead – but customers still want choice

The other issue which has seen a sea-change in consumer attitudes is the identity verification methods used by providers. A few years ago, biometrics were largely unknown by consumers. Today they’re the preferred authentication methods.

When asked about making a payment online with a debit or credit card, 48 percent of respondents selected fingerprint scans as an excellent way to secure an account. Another biometric data set – face scan – was the top choice to access an account securely for 45 percent of respondents.

The appetite for receiving one-time passcodes to verify online payments has also shifted as digital engagement through banking apps has increased. FICO’s survey in 2020 found that only 14 percent wanted to receive notification of a pass-code to their mobile banking app. That percentage has increased to 36 percent in the 2022 survey.

“It is encouraging to see consumer preferences over identity checks starting to match pace with technology,” added Cox. “It seems that as new security methods become available, people are embracing them.”

Getting the balance right

There is, however, still some negative experience of verification checks that needs to be addressed by financial account providers. Consumers aren’t tolerant if their experience is poor. One in four respondents said they had stopped opening a new personal account as the identity checks were too difficult or time-consuming. Similarly, 20 percent said they had abandoned opening a savings account as the checks were too long and difficult.

“Aiming for a completely frictionless experiences could leave a provider over-exposed, but being adaptive is critical,” concluded Matt Cox. “Our survey shows that financial institutions need to be flexible in how they check customers’ identities. Each customer and situation is unique and catering for that well requires sophisticated orchestration of how identity is checked.”

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