GFT’s Banking Disruption Index reveals 48% of 25 to 34-year-olds have encountered or know someone impacted by financial fraud.
According to GFT’s most recent “Banking Disruption Index,” nearly half (48%) of 25 to 34-year-olds have experienced financial fraud or know someone who has, defying the widespread belief that older banking customers are more vulnerable to it. On average, fraudsters steal £570 from their victims.
According to the most recent GFT Banking Disruption Index, a quarterly survey measuring customer opinion toward digital banking, 22% of victims had a two-week wait period before receiving their money returned from their bank as a result of theft.
34% of 25 to 34-year-olds are worried that their bank’s security measures are insufficient, despite the considerable investments banks undertake to shield their clients from fraud.
Additionally, according to GFT, just 24% of people over the age of 55 have either fallen victim to fraud themselves or know someone who has, while only 14% believe their bank’s security procedures are inadequate.
Even with these results, it’s evident that older generations are still vulnerable to fraud because, in cases where fraud occurs, people over 55 lose the most money—fraudsters try to steal an average of £938 from them every time.
Customers of banks are also worried about the security of their banks, especially in light of the increase in newly established neobanks joining the market. According to the survey, only 8% of consumers indicated they would trust a neobank over a traditional bank, whereas 40% of respondents said they would trust a traditional bank to recover their money if they were a victim of fraud.
Banks fight for safety
“This data highlights the growing issue of fraud for younger banking customers, who are more willing to adopt new technology and share data,” stated Richard Kalas, director of client solutions for retail banking at GFT UK.
“Banks need to strike a balance as they support digital innovation to make sure their customers feel safe with the least amount of disruption or friction.”
Many banks are implementing new safety measures in an effort to lower fraud rates, like instant spending alerts that warn users when their card has been used and location monitoring that detects when a card is used in an odd or different place from the customer.
However, according to the survey, 40% of consumers would like to have the option to opt out of participating in these security measures, indicating that banking customers are more concerned about their privacy.
“The boom in digital banking and artificial intelligence can be seen as both a challenge for the banking sector as it catalyzes increasing levels of fraud, as well as an opportunity for financial institutions to tackle it,” stated Simon Newton, principal security lead at GFT UK.
“Our research unequivocally shows that there is a need for stronger security measures from banks, as well as a larger requirement for risk education.
“One approach to give banks and customers higher levels of identification and protection is to apply AI and large data for payment screening.”
