By Mahanum Abdul Aziz - August 24, 2022 @ 1:58pm

 

KUALA LUMPUR: One in three Malaysian consumers state that robust protection against fraud or 'scam' is a key consideration when choosing a new financial account, according to the latest survey by global data and analysis service provider, FICO. 

FICO's latest global consumer fraud survey, which involved 1,000 Malaysian respondents also showed one in four consumers described it as the second most important consideration for them. The stance shown by Malaysian consumers comes in the wake of the pandemic, where most consumers say they will continue to do all their banking digitally and are increasingly aware of the need for strong protection against online fraud. 

FICO Asia Pacific Head of Fraud, Security and Financial Crime Research, CK Leo, said given that there are about 23 million banking customers in Malaysia, if one-third of consumers filter financial providers to find those with strong fraud protection, it is a market more than seven million. "This is an important opportunity and really starts to show that good fraud protection can be a bank's biggest selling asset and not just overhead," he said in a statement.

According to a survey conducted in August 2022, six percent (equivalent to 1.3 million) of Malaysian adults know that they have been a victim of identity theft. Meanwhile, 12 percent (which means about 2.6 million) Malaysians think it is possible that their identity has been used to open an account fraudulently. 

According to FICO, the figures indicate an increased awareness of fraud surrounding identity theft. At the same time, survey respondents said they were also aware of more frequent fraud checks being conducted by banks to try and protect them from identity theft, account takeovers and card fraud. 

The results of the survey showed that 49 percent of respondents said that identity checks have increased when making purchases online and 47 percent have experienced more identity checks when they log into accounts. Malaysians are also increasingly wary of scams, where fraudsters trick consumers into sending them money, known as Authorized Remittance (APP) scams. 

Leo said APP fraud is becoming a bigger problem in Malaysia as he sees an increase in the use of real-time payments. He said fraudsters are attracted to such scams because they bypass victims' checks by allowing self-payments, where funds are cleared immediately and laundered through various accounts.

"Protecting real-time payments requires analytics that look for changes in user behavior such as using accounts or devices outside of their normal habits, as well as something out of the ordinary such as the time of day or frequency of transfers. "FICO found that the use of targeted profiling of customer behavior to detect fraud has produced some impressive findings, with 50 percent more fraudulent transactions detected," he said. 

Touching on convenience, Malaysians stated that too difficult or time-consuming identity checks prevented them from opening multiple different accounts. A total of 37 percent of customers have given up on opening savings accounts, 29 percent on credit cards and 27 percent on personal loans. 

Furthermore, 26 percent stated that difficult or time-consuming identity checks meant that they had reduced or stopped using bank accounts and 27 percent had stopped or reduced the use of credit cards. "As new fraud emerges, banks are increasingly challenged with balancing customer experience needs with risk management and fraud controls such as obtaining payment verification.

Implementing effective account security technologies that reduce friction is a priority," said Leo. The survey also showed a link between the perceived effectiveness of security methods and people's preference for using them. Biometric security is prioritized and polled as the most secure, with fingerprints at the top with 52 percent and face scans at 47 percent. 

Despite this, many users have set the habit and are reluctant to switch from less secure traditional methods, with 34 percent of Malaysians still preferring to use the old way of username and password while 37 percent prefer to receive a passcode sent via SMS. The FICO survey was conducted in August 2022 by an independent research company that adheres to research industry standards. 

About 1,000 Malaysian adults were surveyed, along with 13,000 users in Brazil, Canada, Chile, Colombia, Germany, Indonesia, Mexico, South Africa, Thailand, Peru, the Philippines, Sweden, the United Kingdom and the United States (US).

Date of Input: 21/09/2022 | Updated: 21/09/2022 | nurmiera