Experian recently released its latest annual Identity and Fraud Report that highlights the main security concerns of consumers and how businesses are looking at combatting fraud.
To gain an insight into the core findings Digital Journal spoke with Kathleen Peters, Chief Innovation Officer for Experian in North America.
Digital Journal: Experian recently put out its 9th annual identity and fraud report and noted fraud attacks on consumers are at an all-time high. What are consumers’ top concerns?
Kathleen Peters: This year’s report found that consumers seem to be more resolved to the inevitability of fraud occurring in their lives. However, they are still worried about some specific types of fraud, especially ones that relate to their regular online or digital activities. For example, half of consumers are concerned about conducting activities online, with identity theft (84%) and stolen credit card information (80%) listed as consumer’s top online security concerns, an over 20% jump from 2023. Online privacy (67%), phishing emails or phone scams (65%), and false information or fake news and ads (49%) round out the top five online security concerns for U.S. consumers.
DJ: How businesses address fraud prevention and identity protection seems to have an effect on consumer perception and trust. What did your report reveal?
Peters: We found that consumers want businesses to be able to properly verify their identities. In fact, 63% of people said that it’s extremely or very important for businesses to be able to recognize them online. This correlates with how trustworthy consumers view a company to be with 81% saying they’re more trusting of businesses that can accomplish easy and accurate identification while 48% are more trusting of companies that demonstrate signs of security.
Additionally, when it comes to trust, there are certain businesses that consumers tend to trust most. People listed financial services companies as the most trusted, with retail banks, P2P lending and buy now, pay later financing following.
DJ: Interestingly, your report seems to indicate that consumers have greater trust in more advanced forms of identity verification, such as behavioural analytics. Please explain.
Peters: That’s correct. When it comes to identity verification, consumers have a higher sense of trust with some more advanced methods including physical biometrics, PINs sent to a mobile device and behavioural analytics.
Experian recently acquired NeuroID, an industry leader in behavioural analytics, so we’re excited to bring these capabilities directly to our clients to meet consumer demands. Our clients can now use one service provider to proactively monitor and analyse a user’s real-time digital behaviour (for example, how they navigate a form and enter information). This enables businesses to mitigate fraud in real time while also providing a frictionless customer experience.
DJ: Your study also surveyed businesses about their approach to fraud prevention and protecting their consumers. What were their top concerns?
Peters: Nearly half of companies reported that they have either a medium level (46%) or high level (41%) of concern about the risk of fraud. This could be because many businesses saw an increase in fraud losses this year. In fact, over 50% of businesses surveyed said that their losses due to fraud had either increased significantly more (24%) or somewhat more (35%) compared to previous years.
When it comes to their biggest worries, our report found 45% of companies cited cybercrime as the operational challenge putting the most stress on their business, followed by generative AI fraud and/or deep fakes, peer-to-peer payment scams, identity theft and transaction fraud to round out the list of top five stressors this year.
DJ: How should businesses respond to today’s ever-increasing, faster, more sophisticated fraud attacks?
Peters: The emergence of generative AI has presented new opportunities for fraudsters to create sophisticated schemes at scale. It’s important that businesses proactively prepare to prevent this type of evolving fraud activity. They can work with a trusted partner to identify risk and put in place a multilayered fraud prevention strategy that protects themselves now and in the future. This includes incorporating innovative fraud prevention strategies, like “fighting AI with AI” to safeguard their customers.
Companies should also prioritize education and training for their employees to create an environment that encourages vigilance and easier identification of fraud schemes. Implementing training programs and other learning opportunities can help employees feel confident in identifying and reporting fraud internally, which helps keep the business safer and stronger against potential threats.
