Majority of world worried about internet fraud

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Forty-five percent of consumers worldwide are willing to switch to financial institutions that offer more security protection, according to newly conducted research.

The report from Unisys Corporation, which polled more than 8,000 people around the world on identity fraud and bank security issues, found that a clear majority (66 percent) of people worldwide worry about the fraudulent use of their bank and credit card accounts.

"Banks focus a lot on risk mitigation and physical security but often overlook how to make their customers feel secure," said Dominick Cavuoto, corporate vice president and president of the Global Financial Services practice at Unisys.

"Our research shows people are very worried. What's more, they're willing to switch banks. Financial institutions worldwide must pay more attention to these mounting consumer concerns and look hard at the full impact on their brand...not just consider the monetary impact of fraud. Banks that don't have this complete visibility into the problems of ID fraud risk losing a lot more than a customer's identity," he said.

The study found that the the U.S leads in ID fraud instances (17 percent of U.S. consumers claimed they had been victims) followed by the U.K. (11 percent), Brazil (9 percent), Mexico (8 percent), France (8 percent), Australia (7 percent), Germany (3 percent) and Hong Kong (1 percent).

More Latin Americans (78 percent in Mexico and 70 percent in Brazil) were found to worry "a lot" about the fraudulent use of their bank accounts or credit cards, compared to 23 percent of those in the United States. More people in Germany (17 percent) worry "a lot" than do those in France or the United Kingdom (both 9 percent).

Additionally one-third of worldwide consumers indicated they are willing to pay additional bank fees for better security protection. Loss of money was, perhaps unsurprisingly, identified as the leading concern associated with ID fraud, but time and effort to fix the problem also ranks high. While 27 percent of consumers in the countries surveyed are understandably most concerned about the theft of their funds, a surprising 16 percent cited the aggravation in rectifying the problem (and in the United States, 25 percent cite time and effort as a top concern).

One-third of consumers report receiving information from their banks about "phishing" (email fraud attacks that mimic bank sites). At the same time, 52 percent worldwide say they would like to receive more information from the financial institution about security and fraud protection.

Biometrics (e.g., iris or fingerprint scans) was highlighted as the preferred method cited by consumers to fight fraud and identity theft as followed by smart cards, tokens and more passwords.

"Consumers feel biometrics, smart cards and security tokens would help mitigate risk but it's equally clear there is a lack of communication about fraud prevention," Cavuoto said.

"To secure their business operations, banks need to build better relationships with their customers and partner together to combat ID fraud. Financial institutions need a holistic plan with visibility beyond the latest IT tools. They need to not only install leading security technology but also must implement business processes to better communicate ID fraud prevention tips with customers."

Telephone surveys were conducted on behalf of Unisys among households in Australia, Brazil, France, Germany, Hong Kong, Mexico and the U.S. between July 29 and Aug. 22, 2005, and among U.K. households from June 17-19, 2005.

www.unisys.com

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