(NYSE: FICO)

Highlights

• Payment Fraud is the top financial crime concern for 34% of Indians
• Identity theft worries persist, with 37% believing they have or might have been victims
• Real-time payment scams are on the rise, with 64% receiving scam communications
• Fraud protection is paramount, with ease of use and good fraud protection ranking as top considerations for selecting financial services providers

FICO, a leading global analytics software firm, today unveiled its latest global consumer fraud research, shedding light on Indians' ongoing apprehension regarding real-time payment scams amid the growing adoption of new, convenient, and fast payment channels. According to the study, the primary worry for Indians remains the risk of being tricked into sending money to criminals (34%), which exposes individuals to instant, irrevocable losses rarely eligible for reimbursement.

Additionally, concerns about identity theft persist, with 20% of Indians citing it as their top financial crime concern. This type of fraud carries additional risks beyond financial loss, such as compromised credit scores and the challenging process of restoring financial integrity.

More information: https://www.fico.com/en/latest-thinking/ebook/consumer-survey-2023-digital-banking-customer-preferences-and-fraud-controls

“India’s adoption of real-time payments continues to accelerate, with 98% of adults having sent a real-time payment and 82% expecting to increase their use over the next year,” said C K Leo, FICO's lead for fraud, security and financial crime in Asia Pacific. “As the adoption of real-time payments surges, driven by platforms like Paytm, Google Pay and PhonePe, we're witnessing a transformative shift in financial behaviour. Yet, amidst this rapid digitisation comes an urgent need for heightened vigilance against fraudsters lurking in the digital realm.”

Real-Time Payment Scams: A Growing Concern

As the incidence of scams continues to rise, FICO’s research from last year uncovered a troubling trend related to authorised push payment (APP) fraud and real-time payments in India. A concerning 64% of Indians have received unsolicited text messages, emails, phone calls, or other outreach that they believed to be part of a scam, while 57% of respondents stated that their friends or family members had been victims of a scam.

Shockingly, 45% of respondents admitted to sending real-time payments for investments, goods, or services they never received. Additionally, 36% of those who made scam payments through real-time payments lost up to INR 50,000, while 8% experienced losses of up to INR 6 lakhs. Despite these alarming figures, only 43% reported actual or suspected losses to their banks.

"Banks now face a crucial moment to invest in cutting-edge solutions to tackle the surge in scams, particularly with the swift uptake of real-time payments in the Asia-Pacific financial landscape,” said Leo. “The irrevocable nature of these transactions has led to new criminal threats. By integrating scam-specific analysis and scoring into transactions, along with robust decision-making capabilities across the customer journey, banks can pre-emptively detect and thwart scam payments, sparing customers from financial harm. Furthermore, while some consumers may ignore warnings, the majority will heed alerts and refrain from making real-time payments if alerted to potential scams."

Awareness of identity theft in India among the highest in Asia

Concerningly, the rate of respondents who reported their stolen identity being used to open a financial account was considerably higher in India than in the other countries surveyed. 13% of Indians stated that their identity had been stolen and used to open an account by a fraudster, while this was reported by only 5% of Filipinos and 3% of Indonesians. Given India’s adult population, this 13% translates to over 165 million individuals.

However, despite widespread concern about identity theft, there remains a dissonance between perception and reality among Indians. About 33% believe it unlikely they've been a victim, while 13% see it as possible, and 23% are confident their identity remains untouched.

“While some may downplay the risk of identity theft in India, millions remain vulnerable,” added Leo. “This underscores the need for heightened awareness and proactive measures. By breaking down silos and integrating identity verification and fraud detection processes, we can streamline applications and bolster trust in legitimate customers.”

Indians Prioritise Good Fraud Protection

When asked about the most important considerations respondents have when they select a new provider for a financial account, good fraud protection and ease of use were the two most important. These were both considered significantly more important than good customer service, strong anti-money laundering policies, sound green/environmental policies, ethical use of customer data, behaving fairly, and good value for money.

The survey was conducted in November 2023 by an independent research company adhering to research industry standards. 1,000 Indian adults were surveyed, along with approximately 12,000 other consumers in Canada, U.S., Brazil, Colombia, Mexico, The Philippines, Indonesia, Malaysia, Singapore, Thailand, U.K. and Spain.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520218713/en/