CHICAGO–While consumers have been targeted by increased fraud during the coronavirus pandemic, new research has found consumers expressing confidence in their primary financial services organizations’ efforts to resolve and mitigate fraud issues—although responses differed by generation.
According to research conducted BAI as part of its BAI Banking Outlook program, BAI surveyed financial services leaders and consumers to understand their recent dealings with fraudulent activity. BAI said it found the majority of respondents indicated an increased or equal amount of concern regarding fraud over the past six months, but there were generational differences, with Millennials reporting the greatest increased concern among the generational groups at 55%.
When asked about the frequency of fraudulent activities, Generation Z and Millennials reported higher instances than members of Generation X or Baby Boomers, BAI reported. Furthermore, 68% of all financial services leaders surveyed said fraud challenges have increased, with hacking attempts ranking first and credit card and malware attempts tied for second.
Third-Party Fraud Instances
BAI said its survey found the most frequently cited third-party fraud instances have been in the form of stimulus check and debit card fraud, the latter taking the place of economic relief scams which was witnessed in 2020. The most common first-party fraud has been in the form of check fraud, followed by deposit account fraud.
“Financial services leaders are working at an accelerated rate to protect their customers against fraudsters and fraudulent activities,” said Karl Dahlgren, managing director at BAI. “Since the beginning of the COVID-19 pandemic, most financial services organizations have instituted additional employee training and customer communication to mitigate and respond to instances of fraud—66% of financial services organizations have increased their efforts to combat fraud, including 50% of participating financial services organizations noting their utilization of artificial intelligence (AI) today alongside an additional 32% of financial services organizations indicating they will implement AI in the next year.”
Steps Taken By FIs
BAI said the survey found financial services organizations have also taken additional steps, such as revising employee policies and procedures (50%), hiring or working with a crisis management company (29%), and partnering with a fintech company (28%) to address and prevent fraudulent activities.
In addition, since the beginning of the pandemic, nearly 60% of consumer respondents note they are reviewing their transactions closely, and 39% use a free monitoring service.