2016GlobalConsumerCardFraud:Where
CardFraudIsComingFrom
JULY2016
BenKnieff
Researchsponsoredby:
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.Photocopyingorelectronicdistributionof
thisdocumentoranyofitscontentswithoutpriorwrittenconsentofthepublisherviolatesU.S.copyrightlaw,andispunishablebystatutorydamages
ofuptoUS$150,000perinfringement,plusattorneys’fees(17USC504etseq.).Withoutadvancepermission,illegalcopyingincludesregular
photocopying,faxing,excerpting,forwardingelectronically,andsharingofonlineaccess.
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
TABLEOFCONTENTS
IMPACTPOINTS..............................................................................................................................................4
INTRODUCTION..............................................................................................................................................5
METHODOLOGY........................................................................................................................................5
GLOBALCARDFRAUDSNAPSHOT..................................................................................................................7
FRAUDINTHEAMERICAS.............................................................................................................................15
RISKYBEHAVIOR.....................................................................................................................................15
REPLACEMENTCARDS............................................................................................................................18
CONSUMERATTITUDESTOWARDFRAUD..............................................................................................23
FRAUDINEUROPE,THEMIDDLEEAST,ANDAFRICA...................................................................................25
RISKYBEHAVIOR.....................................................................................................................................25
REPLACEMENTCARDS............................................................................................................................28
CONSUMERATTITUDESTOWARDFRAUD..............................................................................................33
FRAUDINTHEASIA-PACIFIC.........................................................................................................................37
RISKYBEHAVIOR.....................................................................................................................................37
REPLACEMENTCARDS............................................................................................................................40
CONSUMERATTITUDESTOWARDFRAUD..............................................................................................44
RECOMMENDATIONS...................................................................................................................................46
RELATEDAITEGROUPRESEARCH.................................................................................................................47
ABOUTAITEGROUP.....................................................................................................................................48
AUTHORINFORMATION.........................................................................................................................48
CONTACT................................................................................................................................................48
LISTOFFIGURES
FIGURE1:COUNTRIESSURVEYED..................................................................................................................6
FIGURE2:CURRENTTOTALCARDFRAUDRATESBYCOUNTRY.....................................................................8
FIGURE3:CURRENTCREDITCARDFRAUDRATES........................................................................................10
FIGURE4:CURRENTDEBITCARDFRAUDRATES..........................................................................................12
FIGURE5:MULTIPLEFRAUDINCIDENTS......................................................................................................13
FIGURE6:CURRENTPREPAIDCARDFRAUDRATES.....................................................................................14
FIGURE7:RISKYBEHAVIORINTHEAMERICAS............................................................................................16
FIGURE8:RISKYBEHAVIORTRENDSINTHEAMERICAS...............................................................................17
FIGURE9:RISKYBEHAVIORANDFRAUDEXPERIENCEDINTHEAMERICAS.................................................18
FIGURE10:REPLACEMENTCARDSINTHEAMERICAS.................................................................................19
FIGURE11:USEOFREPLACEMENTCARDSINTHEAMERICAS.....................................................................20
FIGURE12:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINTHEAMERICAS.....................21
FIGURE13:SWITCHINGBEHAVIORINTHEAMERICAS................................................................................22
FIGURE14:BACK-OF-WALLETBEHAVIORINTHEAMERICAS.......................................................................22
FIGURE15:CONSUMERTRUSTINFINANCIALINSTITUTIONSINTHEAMERICAS........................................23
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
2
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
FIGURE16:CONSUMERS’FRAUDCONCERNSINTHEAMERICAS................................................................24
FIGURE17:RISKYBEHAVIORINEUROZONE................................................................................................25
FIGURE18:RISKYBEHAVIORINEMEA(NON-EUROZONE)...........................................................................26
FIGURE19:RISKYBEHAVIORANDFRAUDEXPERIENCEDINEUROZONE.....................................................27
FIGURE20:RISKYBEHAVIORANDFRAUDEXPERIENCEDINEMEA(NON-EUROZONE)...............................28
FIGURE21:REPLACEMENTCARDSINEUROZONE.......................................................................................29
FIGURE22:REPLACEMENTCARDSINEMEA(NON-EUROZONE)..................................................................29
FIGURE23:USEOFREPLACEMENTCARDSINEMEA....................................................................................30
FIGURE24:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINEUROZONE...........................31
FIGURE25:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINEMEA(NON-EUROZONE).....31
FIGURE26:SWITCHINGBEHAVIORINEMEA...............................................................................................32
FIGURE27:BACK-OF-WALLETBEHAVIORINEUROZONE.............................................................................33
FIGURE28:BACK-OF-WALLETBEHAVIORINEMEA(NON-EUROZONE).......................................................33
FIGURE29:CONSUMERS’TRUSTINFINANCIALINSTITUTIONSINEUROZONE............................................34
FIGURE30:CONSUMERS’TRUSTINFINANCIALINSTITUTIONSINEMEA(NON-EUROZONE)......................34
FIGURE31:CONSUMERS’FRAUDCONCERNSINEUROZONE......................................................................35
FIGURE32:CONSUMERS’FRAUDCONCERNSINEMEA(NON-EUROZONE)................................................36
FIGURE33:RISKYBEHAVIORINTHEASIA-PACIFIC......................................................................................38
FIGURE34:RISKYBEHAVIORTRENDSINTHEASIA-PACIFIC.........................................................................39
FIGURE35:RISKYBEHAVIORANDFRAUDEXPERIENCEDINTHEASIA-PACIFIC...........................................40
FIGURE36:REPLACEMENTCARDSINTHEASIA-PACIFIC.............................................................................41
FIGURE37:USEOFREPLACEMENTCARDSINTHEASIA-PACIFIC.................................................................41
FIGURE38:SATISFACTIONWITHFINANCIALINSTITUTIONAFTERFRAUDINTHEASIA-PACIFIC.................42
FIGURE39:SWITCHINGBEHAVIORINTHEASIA-PACIFIC............................................................................43
FIGURE40:BACK-OF-WALLETBEHAVIORINTHEASIA-PACIFIC...................................................................43
FIGURE41:CONSUMERS’TRUSTINFINANCIALINSTITUTIONSINTHEASIA-PACIFIC..................................44
FIGURE42:CONSUMERS’FRAUDCONCERNSINTHEASIA-PACIFIC............................................................45
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
3
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
IM PA CTPOINTS
•
ThisImpactReport,basedonaQ22016ACIWorldwidestudyof6,035consumersin
20countries,providesanoverviewofrespondents’attitudestowardvarioustypes
ofcardfraudanddiscussestheactionstheymaytakesubsequenttoafraud
experience.Whereapplicable,italsocomparestheseresultswiththosefromsimilar
ACIsurveysin2012and2014.
•
Ofallcardholders—debit,credit,andprepaid—30%haveexperiencedcardfraudin
thepastfiveyears,asignificantportionofcardholders.
•
Afterexperiencingfraud,40%ofconsumersusethereplacementcardless,atleast
insomesituations,thantheyusedthatcardpreviously.Thisback-of-walletbehavior
islostrevenueforthefinancialinstitution.
•
In2016,17%ofdebitandcreditcardholderscitehavingexperiencedfraudmultiple
timesduringthepastfiveyears,comparedto13%in2014.
•
Consumerswhoaredissatisfiedwithhowtheyaretreatedbytheirfinancial
institutionafterexperiencingfraudsometimeschangeproviders,resultingina
globalattritionrateof20%.Thishighlightstheimportanceofaftercarefollowinga
fraudexperience.
•
Fourteenpercentofglobalconsumerslackconfidencethattheirfinancialinstitution
canprotectthemagainstfraud.Whilethisvariesfromregiontoregion,it
demonstratessomelevelofmisunderstandingaboutwhatstepsinstitutionstake.
•
Fifty-fourpercentofglobalconsumersexhibitatleastoneriskybehavior,whichputs
themathigherriskoffinancialfraud.Educationaboutriskybehaviorsandwhat
consumerscandocanhelpreducefraudratesissorelyneeded—banksmustlearn
howtohelpconsumershelpthemselves.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
4
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
INTR ODUCTION
1
With2,260confirmeddatabreaches in2015aloneandover4billiondatarecordsstolensince
2
2013, thesecurityofthefinancialservicesvaluechainisacriticaltopicwithintheindustryand
amongconsumers.Atthispointintime,theassumptionshouldbethatalmostallusers’
credentialsand/orcardinformationhasbeencompromised.Theundergroundeconomyforuser
informationhasmaturedsomuchthatitisindistinguishablefromalegitimateeconomy.There
arevariousserviceproviders,service-levelagreements,andveryefficientsupply-demand-based
pricing.Itnolongerrequiressophisticatedcomputerscienceskillstoperpetratefraud,asmost
everythingrequiredcanbeacquiredofftheshelffromtheundergroundmarket.
ThisImpactReport,thefirstinatwo-partseriesonhowfinancialfraudaffectsconsumers,will
lookatconsumerfraudexperiences,perceptionsoftrustinfinancialinstitutions,andrisky
3
consumerbehaviors. Thereportlooksat20differentcountriesfromtheAmericas;Europe,the
MiddleEast,andAfrica(EMEA);andtheAsia-Pacific.Therearesomebroadtrendsamongthese
regionsandthecountrieswithinthem,andtherearealsosomeinterestingoutliers.
M E T H O D O LO G Y ACIWorldwide,agloballeaderinelectronicpaymentsforfinancialinstitutions,retailers,and
processors,conductedonlinequantitativemarketresearchinMarch2016andsurveyed6,035
consumers.Thestudywasconductedinatotalof20countriesinthefollowingregions:
•
TheAmericas(NorthandSouthAmerica):Brazil,Canada,Mexico,andtheUnited
States
•
EMEA:France,Germany,Hungary,Italy,theNetherlands,SouthAfrica,Spain,
Sweden,theUnitedArabEmirates(UAE),andtheUnitedKingdom
•
TheAsia-Pacific:Australia,India,Indonesia,NewZealand,Singapore,andThailand
China,Russia,andPolandwereremovedcomparedto2014,andSpain,Thailand,andHungary
wereaddedfor2016(Figure1).
Thereweresomechangesinmethodologycomparedtothe2014reportthatleadstosome
differenceswhencomparingthetworeports.The2014datawasreanalyzedin2016tomatch
thesamemethodology,socomparisonsareapples-to-appleswithinthe2016report,butnot
betweenthe2014and2016reports.
1. Verizon,“2016DataBreachInvestigationsReport,”
http://www.verizonenterprise.com/resources/reports/rp_DBIR_2016_Report_en_xg.pdf,accessed
May22,2016.
2. “BreachLevelIndex,”http://breachlevelindex.com/#sthash.UU29yuUP.dpbs,accessedJune24,2016.
3. SeeAiteGroup’sreportGlobalConsumers:LosingConfidenceintheBattleAgainstFraud,June2014.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
5
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Specifically,in2016theincidenceoffraudwascalculatedbasedthepopulationthatactually
ownedatypeofcard(credit,debit,prepaid),whereasin2014thecalculationwasbasedonthe
entirepopulation,irrespectiveofwhetherallindividualsownedtheparticulartypeofcard.
Figure1:CountriesSurveyed
Source:AiteGroupresearch
Intotal,6,159consumerswereincludedintheresearch:approximately300consumers,divided
equallybetweenmenandwomen,participatedineachofthe20countries.Ofthetotal,6,035
ownoneormoretypeofpaymentcard—creditcard,debitcard,prepaidcard.Thisisthefourth
timethatACIhasfieldedthistypeofsurvey,andcomparativeresultsareincludedfrom2012and
2014.
Ineachcountry,thedatahaveamarginoferrorofapproximately5points.Statisticaltestsof
significance,whereshown,wereconductedatthe95%levelofconfidence.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
6
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
GLOBA LCA R DFR A UDSNA PSHOT
Cardfraudincludesunauthorizedactivityonthethreemaintypesofpaymentcards—debit,
credit,andprepaid.Cardfraudcancomefrommanydifferentangles,includingdatabreaches,
lost/stolencards,socialengineering,phishingattacks,andoftenacombinationofthese.Fraud
ratesaroundtheworldvarygreatlyindifferentregionsandcountries.
ComparedtothestudyfieldedinQ12014,theratesoffraudamongvariouscountrieshave
moved,andfraudratesareincreasinginmanycountries(Figure2).Inthe2016study,Mexico
hasthehighestrateofcreditcardfraudat51%,followedbytheUnitedStatesat46%,andBrazil
at46%(Figure3).
MexicohasexperiencedarockyroadinimplementingEMV,withchallengesbothontheissuer
andmerchantsidesoftheequation.Badactorstakeadvantageofconfusionandimplementation
weaknesses,whichdrivesthishighfraudrate.
IntheU.S.,fraudratesaredrivenbythefactthatitisawealthyeconomyandthatcard
paymentsarethego-topaymentmethodformostconsumers.Combinedwiththeprevalenceof
onlineshoppingandslowadoptionofEMV,theU.S.isstillagoldmineforcriminals.Basedon
othercountries’experiencewithEMVadoption,itisexpectedthatcard-not-present(CNP)fraud
willincreaseastheU.S.continuestomigratetoEMV.
Brazilhasitsownchallenges;withafalteringeconomyandafragmentedcardpayments
environment,itisanattractivemarketforcriminals.Brazilisalsoalargemarketforonline
shopping,butmanye-commercefirmsdonothavestrongcontrolsforfraudprevention.There
aremanyopportunitiestoimproveonlinesecurity,suchas3-DSecure2.0andactivereal-time
transactionmonitoringthatcouldhelpreducefraudratesinBrazil’smarket.
Lookingtowardthefuture,mobilewallets,newpaymentstypesthatcloselyresemblecard
paymentsorevenusethecardnetworkrails,andmobilepaymentschemesoutsidethe
networks(suchasM-PesainKenya)willbeahigherpriority.Whiletherearenumerousnew
paymenttypes,particularlyindevelopingeconomies,cardsandcard-likepaymentswillcontinue
todominateconsumerpaymentsinmostgeographiesforquitesometime.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
7
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure2:CurrentTotalCardFraudRatesbyCountry
Percentage of Respondents Who Have Experienced Card Fraud in the
Last 5 Years, 2012 to 2016
Mexico
33%
Brazil
30%
33%
47%
41%
42%
40%
United States
Australia
India
Singapore
Canada
South Africa
France
United Kingdom
Dubai (UAE)
Italy
Spain
Indonesia
Thailand
New Zealand
Germany
Sweden
The Netherlands
Hungary
56%
44%
49%
31%
31%
37%
41%
37%
36%
28%
26%
35%
21%
25%
33%
30%
25%
29%
26%
20%
29%
28%
34%
27%
44%
36%
27%
20%
24%
26%
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
26%
22%
18%
23%
20%
18%
16%
13%
14%
10%
12%
14%
13%
12%
9%
Source:AiteGroup,ACIWorldwidestudiesofconsumersin20countries,Q22016andQ12014,andin17countries,Q32012
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
8
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Creditcardfraudratesinthe2016studyshowthatconsumersaroundtheworldstillexperience
cardfraud,despitetheimplementationoffraudanalyticssolutionsandEMVinmanycountries.
Thereisnoshortageofwayscriminalscantakeadvantageofcarddatatoperpetratefraud.
TheU.S.lagsinEMVimplementationcomparedtomostoftherestoftheworld,thoughthereis
4
someprogress. Solongastherearecountriesthatdonotacceptchipcardsfully,therewillstill
becardswithmagneticstripes,fortravelersiffornothingelse.Thismeansskimminganddata
breacheswillcontinuetobeachallenge,andCNPfraudwillcontinuetobeachallenge
irrespectiveofEMVmigrations,barringsomeunforeseeninnovations.
Insomecountries,thereareindicatorsthatnotonlydoesCNPfraudincreasefollowingEMV
rolloutbutalsoapplicationfraud.Whileapplicationfraudhasexistedsincebanksbeganopening
accounts,itiseveneasiernowduetothebreadthofpersonalinformationavailablefrom
breachesaswellasthehugeamountsofinformationpublishedbyconsumersonsiteslike
Facebook,LinkedIn,Instagram,andmanyothers.Thiswealthofdatahaseffectivelyrendered
knowledge-basedauthentication(KBA)uselessforauthenticationandmakesapplicationfraud
somucheasier.
4. SeeAiteGroup’sreportEMV:IssuanceTrajectoryandImpactonAccountTakeoverandCNP,May
2016.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
9
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure3:CurrentCreditCardFraudRates
Q. Have you experienced fraud on your credit card in the past 5 years?
Mexico
United States
Singapore
Canada
India
South Africa
France
Spain
Indonesia
Dubai (UAE)
Thailand
New Zealand
Germany
Sweden
The Netherlands
Hungary
46%
46%
28%
31%
37%
28%
30%
35%
27%
24%
32%
19%
20%
30%
35%
29%
28%
26%
20%
28%
26%
19%
28%
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
25%
14%
16%
25%
26%
31%
24%
United Kingdom
Italy
38%
37%
39%
Brazil
Australia
51%
29%
17%
22%
24%
33%
40%
20%
18%
15%
17%
15%
10%
12%
8%
11%
12%
11%
8%
8%
Source:AiteGroup,ACIWorldwidestudiesofconsumersin20countries,Q22016andQ12014,andin17countries,Q32012
TheimplementationofEMVwillalsocurtailcounterfeitfraudondebitcards.Issuersare
generallyfocusedonissuingchipcardstotheirmostactiveusersaswellasonregularexpiry.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
10
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Smallerinstitutionsoftenneedtogetinaqueuewiththeircardprocessorstoissuechipcards.
Someinstitutionsgotinthisqueueearly,butforthosetowardthebackofthequeue,itmaytake
sometime,andtheinstitutionwillhavetocarrytheliabilitywhencardsareusedatchipenabledpoint-of-sale(POS)terminals.
Whilesomeofthecountriessurveyedhavechanged,itisclearthatMexico,India,Brazil,andthe
U.S.generallyhavesomeofthehighestcardfraudrates.Inthe2016study,cardholdersin
Mexicoexperiencethehighestrateofdebitcardfraudat34%,followedbyBrazil(25%),India
(23%),andFrance(22%).TheU.S.closelytrailsFranceat21%.Inthe2014study,cardholdersin
Chinaexperiencedthehighestrateofdebitcardfraudat30%,followedbyIndia(24%),Mexico
(21%),andtheUnitedStates(20%;Figure4).Mexico,Brazil,andFranceexperiencedrather
dramaticincreasesindebitcardfraudin2016comparedto2014.
Itisnotablethatthecountrieswithhigherdebitcardusageratesrelativetocreditcardusage
rates(e.g.,Sweden,theNetherlands,Germany)alsohaverelativelylowdebitcardfraudrates,in
partbecauseoftheextensiveandeffectiveimplementationofEMV,andalternativepayment
options(e.g.,ELVinGermany,Proton,andotherelectronicpurseoptions).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
11
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure4:CurrentDebitCardFraudRates
Q. Have you experienced fraud on your debit card in the past 5 years?
Mexico
21%
26%
25%
Brazil
13%
17%
India
France
15%
13%
South Africa
Spain
United Kingdom
Australia
Singapore
Dubai (UAE)
Italy
Indonesia
Thailand
Sweden
New Zealand
The Netherlands
Germany
Hungary
23%
24%
21%
22%
21%
20%
22%
19%
16%
12%
17%
United States
Canada
34%
7%
17%
15%
17%
17%
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
13%
17%
11%
9%
15%
11%
13%
15%
14%
11%
13%
10%
11%
13%
10%
9%
13%
13%
9%
11%
10%
5%
8%
8%
9%
7%
7%
7%
6%
Source:AiteGroup,ACIWorldwidestudiesofconsumersin20countries,Q22016andQ12014;andin17countries,Q32012
Aratherlargenumberofconsumersexperienceddebitand/orcreditcardfraudonmorethan
oneoccasioninthelastfiveyears.Seventeenpercentofglobalconsumersexperienceddebitor
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
12
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
creditcardfraudmorethanonceinthepastfiveyears,astatisticallysignificantincreasefrom
2014and2012surveys(Figure5).Thewealthofstolenpaymentdetailsavailablethroughdata
breachesandphishingscamsmeanseveryoneisatargetandcanexperiencemultipleincidences
offraudwithdifferentcards.Ascriminalstrytomaximizetheirtakefromasinglecard,fraudcan
alsooccurmultipletimesforasinglecard.
Figure5:MultipleFraudIncidents
Q. Have you experienced more than 1 incident of debit or credit card
fraud in the past 5 years?
13%
13%
2012 (n=4,813)
2014 (n=4,866)
17%
2016 (n=4,699)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Prepaidcardsarerelativelynewcomparedtocreditanddebitbutareincreasinglybeingusedfor
publicbenefits,payroll,andasanalternativetoatraditionalcheckingorcurrentaccount.
Prepaidcardusageandfraudratesvarywidelyacrossthecountriesrepresented.Thehighest
rateoffraudonprepaidcardsisexperiencedbyconsumersinIndiaandBrazilat18%,followed
byMexicoat14%,thenItalyandIndonesiaat13%.France,Thailand,andSpainareequallyclose
andwithinthemarginforerror.Consumersinmanyothercountriesexperiencelowfraudrates
(Figure6).
Itislikelythatoverallusageratescorrelatetothesenumbers.Forexample,inIndiamany
governmentemployeesarepaidviareloadableprepaidcards,andmanygovernmentbenefits
aredistributedthroughgovernmentprepaidcards.Anotherpotentialfactorinthelowerfraud
ratesisthatfewprepaidcardsareusedforaverylongtimeorcarryhighbalances;thus,theyare
notonlyamovingtargetforfraudstersbutalsoalower-valueone.Consumersmayalsonot
differentiatebetweenopen-andclosed-loopcards,whichhavevaryinglevelsofvalueto
criminals.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
13
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure6:CurrentPrepaidCardFraudRates
Q. Have you experienced fraud on your prepaid card in the past 5
years?
18%
20%
23%
18%
India
Brazil
8%
9%
Mexico
8%
Italy
Indonesia
France
5%
5%
4%
Dubai (UAE)
Singapore
Sweden
Canada
New Zealand
United States
Hungary
Germany
South Africa
The Netherlands
12%
11%
Spain
United Kingdom
12%
13%
11%
10%
13%
12%
12%
Thailand
Australia
14%
2%
9%
11%
8%
7%
12%
8%
7%
6%
2016 (n=5,861)
2014 (n=5,174)
2012 (n=4,813)
7%
3%
3%
5%
3%
3%
5%
2%
3%
4%
2%
4%
5%
6%
4%
4%
3%
4%
4%
4%
6%
2%
3%
2%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016andQ12014;and17countriesinQ32012
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
14
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
FR A UDINTHEA M ER ICA S
Thissectionofthereportexaminesconsumerbehaviorsrelatedtofinancialfraudinthe
Americas.ThereisalotofvarietyintheAmericas;theU.S.andCanadahavequitematurecard
paymentsenvironments,whilemarketsincountriessuchasMexicoandBrazilaremorenascent.
Thisisreflectedinthefraudrates:TheU.S.andCanadahavematurecontrols,butother
geographies,despiteleveragingEMV,facehighratesoffraud.
R I S K Y B E H AV I O R Consumerbehaviorhassomeimpactonwhethersomeonebecomesavictim.Incasessuchasa
databreachorskimming,theconsumerhaslittlecontrol,butconsumerscanhelptoprevent
phishing,lost/stolencards,andfriendlyfraud.Riskybehaviorssuchaskeepingone’sPINwiththe
cardhaveadirectcorrelationtoexperiencingfraud.Itisimportanttoeducatecustomers,but
financialinstitutionsneedtoavoidcausingmentalfatiguethatwillleadtousersignoringthose
messages.
Thereisalwaysabalancebetweenusabilityandsecurity,andifsecuritybecomestooonerous
fortheusers,theyfindawayaroundit(suchaswritingdownPINsorpasswords).Toohighofa
barrieractuallymotivatesuserstoengageinriskybehaviors.Morefirmsarelookingforwaysto
improvecustomerexperienceandsecurityatthesametime.Passivebiometricsandmore
intelligentmonitoringtoolsaretwoexamplesoftechniquesusedtoimprovesecuritywhile
avoidingnegativeuserimpact.Asmobilebankingandcardpaymentsgrowinadoption,there
arenewriskswithuserssecuring,orfailingtosecure,theirdevices.
Thesurveyquestionedconsumersonwhethertheyhadengagedinfivedifferentriskybehaviors
inthelastfiveyears(Figure7).Therearecertainlyadditionalriskybehaviors,andtherewillbe
newonesastechnologyevolves.
ConsumersinBrazilexhibitthemostriskybehaviors.Overaquarter(27%)statetheyleave
smartphonesunlockedwhennotinuse,and23%leavepersonalinformationinthetrashbin.
Mexicoisnotfarbehindintherangeofriskybehaviors.Thereisastrongcontrastbetweenthe
fraudratesandbehaviorsintheU.S.andCanadacomparedtoBrazilandMexico;U.S.and
Canadianconsumersexhibitmorecautionthattheirsoutherncounterparts(Figure7).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
15
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure7:RiskyBehaviorintheAmericas
Q. Which of the following have you done in the past 5 years?
20%
20%
Left smartphone unlocked
when not using it
15%
27%
18%
Thrown papers or
documents with account
numbers (e.g., bank
statements) in the trash
bin
Used online banking or
internet shopping without
security software or on a
public computer
23%
16%
23%
14%
18%
10%
22%
Canada
Brazil
9%
Made a note of your PIN
and carried it with you or
kept it with your card
United
States
Mexico
12%
7%
15%
8%
Responded to emails or
calls asking for bank
details
10%
5%
11%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Forcardfraudtodecrease,consumersmustplayarole,andlimitingriskybehaviorisoneway
consumerscanhelpprotectthemselves.Riskybehaviorsaregenerallyrising,muchofwhichcan
beattributedtotheincreaseinunsafesmartphoneusage(Figure8).Financialinstitutionscan
benefitbyfurthereducatingcustomersonbestpracticestokeepthemsecure.Additional
educationcanbeavaluablecustomertouchpointandcansupportafinancialinstitution’sbrand
asatrustworthypartner.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
16
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure8:RiskyBehaviorTrendsintheAmericas
Risky Behavior Trends Over 2014 and 2016
6%
9%
11%
7%
10%
20%
12%
12%
15%
22%
22%
30%
23%
8%
9%
18%
27%
23%
33%
2014
(n=307)
20%
21%
27%
2016
(n=303)
2014
(n=300)
2016
(n=300)
Mexico
5%
6%
7%
Brazil
18%
13%
11%
2014
(n=311)
5%
7%
10%
14%
20%
2016
(n=300)
United States
6%
5%
12%
16%
12%
15%
2014
(n=304)
2016
(n=303)
Canada
Responded to emails or calls asking for bank details
Made a note of your PIN and carried it with you or kept it with your card
Used online banking or internet shopping without security software or on a public computer
Thrown papers or documents with account numbers (e.g., bank statements) in the trash bin
Left smartphone unlocked when not using it
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016andQ12014
Itisclearthat,ingeneral,consumerswhoavoidriskybehaviorsarelesslikelytoexperience
fraud(Figure9).Thispointstoeducationasakeycomponenttopreventingfraudattheuserbehaviorlevel.Themoreeducatedconsumersareaboutriskybehaviors,themorelikelytheyare
toavoidthosebehaviors.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
17
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure9:RiskyBehaviorandFraudExperiencedintheAmericas
Fraud Experienced by Respondents Who Did and Did Not Participate in Risky
Behavior in the Americas
United States
Mexico
Engaged in risky behavior (n=154)
Brazil
60%
Did not engage in
risky behavior (n=124)
47%
53%
Engaged in risky behavior (n=133)
46%
54%
Did not engage in
risky behavior (n=160)
Engaged in risky behavior (n=171)
Canada
40%
Did not engage in
risky behavior (n=106)
Engaged in risky behavior (n=117)
58%
43%
42%
58%
64%
51%
Did not engage in
risky behavior (n=180)
Have not experienced card fraud
36%
49%
73%
27%
Have experienced card fraud
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
REPLACEMENTCARDS
Databreacheshavebecomederigueur,andissuersandmerchantscansafelyassumethat
paymentcarddetailsaswellasotherinformation,suchasPINs,emails,andaddresses,forany
givencustomerhavebeenbreached.Asaresultofsomebreaches,somecardissuersmail
replacementcardstotheircardholderseveniftherehasnotyetbeenfraudontheaccount,
thoughmanyissuerstrytolimitcardreissuanceandpreferenhancedmonitoring.Thisreduces
costsfortheissuersandinconvenienceforconsumers.
IntheAmericas,approximately53%ofAmericansreceivedareplacementcardduringthepast
year,alongwith46%ofMexicans,30%ofCanadians,and45%ofBrazilians.Giventhehuge
numberofdatabreachesimpactingmanyretailers,itcanbedifficulttoidentifythesourceofthe
databreachandtracethefraudtoanygivenentity(Figure10).Itshouldbenotedthat
consumersmaynotrealizeexactlywhytheyhavereceivedanewcard.Sothereisapossibility
thatacardwasreissuedforfraudorpotentialfraudthattheconsumerwasn’tawareof;itisalso
possiblethatcardswerereissuedingeneralrotationorforEMVimplementation,butthe
consumercouldhavethoughtitwasfraud.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
18
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure10:ReplacementCardsintheAmericas
Q. Has your financial institution sent a new debit, credit, or prepaid
card to you during the past year because of a data breach or fraudulent
activity?
United States
(n=293)
47%
40%
Mexico (n=278)
54%
36%
Brazil (n=277)
55%
35%
Canada (n=297)
No
70%
Yes, once
Yes, twice
10%
8%
6%
24%
Yes, 3 times
5%
Yes, more than 3 times
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
InMexico,replacementcardsarefarmorelikelytogotobackofwallet(getusedlessoften),
with57%ofrespondentsmovingthecardbackwardinthewallet.Thereisacleardifferencein
wallet-positionbehaviorbetweentheU.S.andCanada,whichshowlowernumberschanging
cards,andMexicoandBrazil,whichshowmuchhigherratesofdowngradingacard.Thismaybe
duetogreaterstickinessassociatedwithcustomerloyaltyprogramsandmultipleproduct
relationships(Figure11).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
19
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure11:UseofReplacementCardsintheAmericas
Percentage of Respondents in the Americas Who Use Their Replacement
Card Less as a Result of Fraud or a Breach
57%
42%
25%
18%
Mexico (n=127)
Brazil (n=125)
Canada (n=88)
United States (n=154)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Becomingavictimoffraudcanfeeljustasviolatingasahomeburglary,understandablyleaving
consumersemotional,confused,andasking“whydidthishappentome?”Consideringthis
emotionalstate,financialinstitutionsmustfocusoncustomerservicetocalmcustomersand
helpthemthroughtherequiredpost-fraud“aftercare”process.Apositiveaftercareexperienceis
ahugecustomer-retentionopportunityandhelpsrebuildconfidencewithconsumers.Thisis
especiallycriticalsinceitiseasyforfraudspecialiststobecomeratherjaded,anditshouldbe
reinforcedasapartofregulartraining—thoseagentsmighthavetoactasmuchlikecounselors
ascustomerserviceagents.
IntheAmericas,consumersintheU.S.arethemostpleasedwithtreatmentfromtheir
institutionafterexperiencingfraud;90%ofconsumersaresomewhathappyorveryhappywith
thetreatmenttheyexperienced.SecondisCanada,where81%ofconsumersareatleast
somewhathappywiththeirtreatment.Therehavebeensomeimprovementscomparedto2014
withconsumersinMexicoandBrazil;80%inMexicoareatleastsomewhathappywiththe
institution,and65%arethesameinBrazil(Figure12).Thereisplentyofopportunitytoimprove,
especiallyinLatinAmerica,whereconsumerexperiencemarksarenotverystrong.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
20
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure12:SatisfactionWithFinancialInstitutionAfterFraudintheAmericas
Q. How happy were you with the treatment from your financial institution
when you experienced card fraud?
United States
(n=140)
Canada (n=105)
Mexico (n=159)
Brazil (n=137)
9%
7%
9%
31%
12%
39%
11%
13%
Very unhappy
59%
42%
43%
22%
37%
34%
Somewhat unhappy
Somewhat happy
31%
Very happy
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Consumerswhoexperiencefraudandaredissatisfiedwiththeaftercareexperiencesometimes
changeproviders.CustomerdissatisfactionratesinMexicoandBrazilarerelativelyhigh,soitis
notsurprisingthat23%and18%ofconsumersinthoserespectivecountrieschangeproviders
afterafraudexperience.Thisisanimprovementover2014,when33%ofconsumersinBrazil
and21%ofconsumersinMexicoweredissatisfied.
IntheUnitedStates,6%ofconsumersswitchproviders,andinCanada,11%doso(Figure13).
Thisisashiftfrom2014,whentheU.S.switchingratewas9%andtheCanadaswitchingratewas
6%.TheratherlowU.S.andCanadianconsumerswitchingratescouldbeduetoparticularly
stickyrelationshipswithfinancialinstitutions.Consumersmayhavemultipleproducts,suchasa
homemortgage,401(k),orautoloan,withthesameinstitution,andcardloyaltyprograms
incentthemtoremainwiththeinstitutioneveniftheywerenotparticularlyhappywiththe
aftercareexperience.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
21
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure13:SwitchingBehaviorintheAmericas
Q. As a result of your experience with fraud, did you change your
financial institution or credit card company?
Mexico (n=159)
77%
Brazil (n=137)
23%
82%
Canada (n=105)
18%
89%
United States
(n=140)
11%
94%
6%
No, I did not
Yes, I did
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Switchinginstitutionshasasignificantcostforconsumers,andsomemaychoosetousea
differentcard(i.e.,front-of-walletcard)orusecashiftheirtrustdiminishesafterafraudevent
ratherthanchangefinancialinstitutionsoutright.Broadly,intheU.S.andCanada,consumersdo
notexhibitastrongpreferenceforusinganalternatepaymentmethodfollowingafraudevent
(Figure14).InBrazilandMexico,overhalfofconsumersreportatleastsomeback-of-wallet
behavior.
Figure14:Back-of-WalletBehaviorintheAmericas
Q. When you experienced fraud, did you choose to use cash or an
alternative payment method over a credit or debit card following the
card fraud incident?
Mexico (n=159) 4%
Brazil (n=137)
3%
Canada (n=105) 3%
United States
2%
(n=140)
31%
51%
46%
14%
40%
56%
11%
33%
69%
Used cash instead of
my debit card, but not
instead of my credit card
8%
24%
No
Yes, but only
in some situations
6%
Yes, in all
situations
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
22
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
CO N S U M E R AT T I T U D E S TO WA R D F R A U D Fraudandsecurityhavebecomeamass-markettopic—storiesofcomputerhackers,malware,
databreaches,fraudrings,andvictimsofidentitytheftareconstantlyinlocalandnationalnews
media.Itisunderstandablethatconsumersmightbeconcerned,especiallyasinstitutionsdon’t
wanttoshareallthecountermeasuresandcontrolstheyareusingtoavoidprovidingthe
criminalsaniceplaybookfromwhichtowork.
IntheAmericas,consumersdonothaveabsoluteconfidencethattheirfinancialinstitutionscan
protectthem,butthemajoritybelievefinancialinstitutionsareatleastdoingthebesttheycan
(Figure15).SomeinstitutionsintheAmericashavehighlightedsecurityinmarketingand
brandingmaterials,andappeartoseeapositiveeffectbycommunicatingtocustomerstheir
commitmenttosecurity.
Figure15:ConsumerTrustinFinancialInstitutionsintheAmericas
Q. Do you have confidence in your financial institution to protect you
from card fraud?
United States
(n=293)
8%
Canada (n=297)
8%
Brazil (n=277)
67%
69%
13%
60%
Mexico (n=278) 4% 12%
No, I have very
little confidence
they can
24%
55%
Not really,
they could
do more
21%
26%
30%
Yes, to an extent,
they're doing
what they can
Yes,
absolute
confidence
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Inthecountrieswherefraudratesarehighest,consumersexpresshigherdegreesofconcern.
Thisisonlylogicalgiventhatfraudexperiences,especiallymultipleexperiences,generallylead
todiminishedtrust.
TheUnitedStatesisalargetargetwithrelativelyhighratesoffraud,yetconsumersexpressless
concern,sinceU.S.consumersareprotectedbyfederalregulations(suchasRegulationE)and
paymentnetworkpoliciesthatrequirefinancialinstitutionstoreimbursethemwhentheyare
victimizedbyelectronicfraud.ConsumersinMexicoandBrazil,withhigherfraudratesandless
regulatorystructure,aremoreconcernedabouteverycategoryoffraudcomparedtoconsumers
intheUnitedStatesandCanada.InBrazilandMexico,consumersaremostconcernedabout
identitytheftandfraudontheirdebitcards.IntheUnitedStatesandCanada,consumersare
mostconcernedaboutidentitytheft,databreachesthatresultincompromisedaccount
numbers,andfraudontheircreditcards(Figure16).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
23
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Ingeneral,strongconsumerprotectionsintheU.S.andCanadaappeartoreduceconsumers’
concernoverfraudeventsbutcertainlydonotalleviateallconcerns.Theseregulationsand
policiesalsocreateamoralhazard,sinceconsumershavelessofareasontoavoidrisky
behaviors.
Figure16:Consumers’FraudConcernsintheAmericas
Percentage of Consumer Who Are Very Concerned About Fraud Types
in the Americas
51%
83%
Identity theft
55%
74%
50%
78%
Data breach resulting in compromised
account numbers
48%
77%
39%
77%
Fraud on my credit card
48%
73%
36%
70%
Online banking fraud
41%
67%
35%
76%
Fraud on my debit card
39%
62%
28%
68%
Direct debit fraud (auto payment from
account)
33%
58%
21%
60%
Cheque/check fraud
21%
55%
31%
Mobile wallets, or electronic purses such
as using PayPal on a phone, or using
Apple Pay, Google Pay, or making in-app
purchases
48%
33%
44%
Canada (n=303)
10%
Fraud on my prepaid card
United States
(n=300)
Mexico (n=303)
39%
Brazil (n=300)
12%
40%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
24
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
FR A UDINEUR OPE,THEM IDDLEEA ST,A ND
A FR ICA ManycountriesinEMEAhavewell-developedbankingsystems.Somehaveemergingeconomies,
withconsumersgainingnewaccesstomanybankingproductsinrelativelyrecentyears.Manyof
theseeconomiesareskippingcardsforthemostpart(mostlyusedbythewealthyandtourists)
andareleveragingalternative,frequentlymobile-basedpaymentoptions.Itissomewhat
difficulttocomparefinancialfraudacrosssuchdiverseeconomies,andthisreportbreaksout
eurozonemembersfromtherestofEMEAtobettercomparetheregions.
R I S K Y B E H AV I O R SimilartoconsumersintheAmericas,consumersinsurveyedEMEAcountriesarelargely
educatedtoignoreemailsandcallsrequestingdetailsabouttheirbankaccounts,although
consumersintheUAEandSouthAfricarespondmorefrequently(Figure18).Likewise,
consumersinmostcountriesnolongermakeanoteoftheirPINandcarryitwiththeircards;
however,ItalianandUAEconsumerswritedowntheirPINsat19%and25%,respectively(Figure
17andFigure18).Thisisaseriousflawinconsumereducationandapracticethatshouldbe
addressed.TheUAEhasparticularlyhighfiguresofriskybehaviors,whichlikelycontributeto
higherfraudrates.
Figure17:RiskyBehaviorinEurozone
Q. Which of the following have you done in the past 5 years?
25%
15%
13%
21%
29%
Left smartphone unlocked
when not using it
Thrown papers or
documents with account
numbers (e.g., bank
statements) in the trash
bin
Used online banking or
internet shopping without
security software or on a
public computer
16%
12%
14%
22%
26%
8%
12%
18%
8%
20%
3%
Made a note of your PIN
and carried it with you or
kept it with your card
Responded to emails or
calls asking for bank
details
10%
France (n=304)
Germany (n=301)
Italy (n=304)
The Netherlands
(n=300)
Spain (n=303)
19%
4%
9%
4%
4%
5%
3%
4%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
25
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure18:RiskyBehaviorinEMEA(Non-Eurozone)
Q. Which of the following have you done in the past 5 years?
19%
27%
22%
28%
16%
Left smartphone unlocked
when not using it
16%
Thrown papers or
documents with account
numbers (e.g., bank
statements) in the trash
bin
25%
30%
24%
13%
United Kingdom
7%
Used online banking or
internet shopping without
security software or on a
public computer
26%
14%
18%
Sweden (n=302)
9%
8%
25%
Made a note of your PIN
and carried it with you or
kept it with your card
UAE (n=300)
7%
10%
8%
South Africa
(n=303)
Hungary (n=303)
4%
19%
Responded to emails or
calls asking for bank
details
3%
10%
5%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Overall,thereisstillplentyofriskybehaviorinallgeographies,andthesebehaviorscertainly
havesomeimpactontheleveloffraud.Ineverycountrytherearehigherincidencesoffraud
whenconsumersparticipateinriskybehavior(Figure19andFigure20).Themagnitudeof
differencebetweenriskyandnonriskyconsumersisquitesubstantial,andchangingthose
behaviorscanhavearealimpactonfraud.Consumereducationandwell-timedreminderscan
slowlybutsurelyreducetheseriskybehaviors.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
26
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure19:RiskyBehaviorandFraudExperiencedinEurozone
The
Netherlands
Germany
Spain
Italy
France
Fraud Experienced by Respondents Who Did and Did Not Participate in Risky
Behavior in the EMEA
Did not engage in risky
behavior (n=162)
Engaged in risky
behavior (n=127)
77%
23%
61%
39%
Did not engage in risky
behavior (n=149)
Engaged in risky
behavior (n=145)
84%
62%
38%
Did not engage in risky
behavior (n=122)
Engaged in risky
behavior (n=168)
Did not engage in risky
behavior (n=175)
Engaged in risky
behavior (n=121)
84%
16%
65%
35%
87%
13%
75%
Did not engage in risky
behavior (n=172)
Engaged in risky
behavior (n=125)
16%
25%
92%
78%
Have not experienced card fraud
8%
22%
Have experienced card fraud
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
27
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure20:RiskyBehaviorandFraudExperiencedinEMEA(Non-Eurozone)
Hungary
Sweden
UAE
United
Kingdom
South Africa
Fraud Experienced by Respondents Who Did and Did Not Participate in Risky
Behavior in the EMEA
Did not engage in risky
behavior (n=133)
Engaged in risky
behavior (n=162)
71%
29%
64%
Did not engage in risky
behavior (n=183)
Engaged in risky
behavior (n=112)
73%
Did not engage in risky
behavior (n=139)
Engaged in risky
behavior (n=157)
Did not engage in risky
behavior (n=171)
Engaged in risky
behavior (n=133)
27%
67%
Did not engage in risky
behavior (n=66)
Engaged in risky
behavior (n=213)
36%
33%
86%
14%
69%
31%
90%
10%
82%
18%
92%
88%
Have not experienced card fraud
8%
12%
Have experienced card fraud
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
REPLACEMENTCARDS
AcrossalltheEMEAcountriessurveyed,therateatwhichconsumersreceivedareplacement
cardduetofraudordatabreachesduringthepastyearrangesfrom10%inHungary(where
fraudislow)to29%intheUAE(oneofthecountrieswiththehighestfraudratesinthestudy).A
smallbutsubstantialnumberofconsumersreceivedmorethanonereplacementcardduringthe
pastyear(Figure21andFigure22).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
28
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure21:ReplacementCardsinEurozone
Q. Has your financial institution sent a new debit, credit, or prepaid card
to you during the past year because of a data breach or fraudulent
activity?
Spain (n=290)
76%
21%
France (n=289)
78%
18%
Germany (n=296)
78%
19%
Italy (n=294)
83%
The Netherlands
(n=297)
15%
88%
No
Yes, once
9%
Yes, twice
Yes, 3 times
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure22:ReplacementCardsinEMEA(Non-Eurozone)
Q. Has your financial institution sent a new debit, credit, or prepaid card
to you during the past year because of a data breach or fraudulent
activity?
UAE (n=279)
71%
United Kingdom
(n=295)
22%
78%
South Africa
(n=295)
20%
81%
Sweden (n=296)
15%
87%
Hungary (n=284)
11%
90%
No
Yes, once
5%
8%
Yes, twice
Yes, 3 times
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Replacementcardsarenotabadthinginandofthemselves.Someconsumersappreciatea
proactiveapproachfollowingadatabreachoridentifiedskimmingincident.Othersmayfindthis
annoyingiftheyneedtoupdaterecurringbillinginformation.Itisverycriticalthatinstitutions
provideveryclearinformationincasesofbreachorskimmingevents.Manyissuersareoptingto
morecloselymonitoraccountsthatmaybeinvolvedinabreachorskimmingeventratherthan
reissuecards.Thiscanreducecostsforissuersandreduceinconvenienceforconsumers.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
29
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
AcrosstheEMEAcountries,consumersusereplacementcardslessthanthecardstheyreplaced
atratesrangingfrom25%inGermanyto51%intheUAE.Thesehighratesofback-of-wallet
behaviorreducecardissuers’revenueanddemonstratediminishingtrustinthecardsor
financialinstitutionsinvolved(Figure23).
Figure23:UseofReplacementCardsinEMEA
Percentage of Respondents in the EMEA Who Use Their Replacement Card Less as a
Result of Fraud or a Breach
51%
47%
44%
43%
41%
35%
33%
33%
32%
25%
UAE (n=81) Italy (n=49)
Spain
(n=71)
The
Netherlands
(n=35)
South
Africa
(n=56)
France
(n=63)
United
Kingdom
(n=66)
Sweden
(n=39)
Hungary
(n=28)
Germany
(n=64)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Afterexperiencingfraud,atleast50%ofconsumerswereatleastsomewhathappyacrossall
eightcountriessurveyed.FranceandtheU.K.sawsomeofthemostsatisfiedconsumers,with
80%atleastsomewhatsatisfiedinbothcountries.Others,suchasSpain,Italy,Hungary,South
Africa,andtheUAE,hadsignificantpopulationsthatwereatleastsomewhatunhappy(Figure24
andFigure25).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
30
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure24:SatisfactionWithFinancialInstitutionAfterFraudinEurozone
Q. How happy were you with the treatment from your financial institution
when you experienced card fraud?
The Netherlands
(n=41)
7%
Germany (n=53)
France (n=88)
17%
17%
27%
8%
36%
17%
3%
40%
41%
Spain (n=79)
13%
20%
Italy (n=79)
13%
19%
Very unhappy
49%
39%
35%
32%
47%
Somewhat unhappy
22%
Somewhat happy
Very happy
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure25:SatisfactionWithFinancialInstitutionAfterFraudinEMEA(Non-Eurozone)
Q. How happy were you with the treatment from your financial institution
when you experienced card fraud?
United Kingdom
(n=86)
9%
Sweden (n=42) 5%
Hungary (n=27)
South Africa
(n=98)
UAE (n=76)
10%
21%
19%
11%
14%
9%
Very unhappy
59%
19%
57%
22%
19%
16%
24%
25%
Somewhat unhappy
48%
45%
50%
Somewhat happy
16%
Very happy
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Eventhoughsomanyconsumersareatleastsomewhatunhappywiththeirtreatment
subsequenttoexperiencingfraud,relativelyfewconsumersreportthattheyswitchedfinancial
institutions.TheUAEisastandoutwitha30%switchingrate(Figure26).Whiletheseratesmay
seemrelativelylow,financialinstitutionsarecompetingforcustomers,anditismoreexpensive
toacquireacustomerthanitistokeepone;retainingcustomersresultsinbothretaining
revenueanddecreasingcosts.Hungary’srelativelylowsatisfactionratesdonottranslateto
higherswitchingnumbers.Itisnotclearwhatreasonscontributetothishighdegreeofloyalty.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
31
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure26:SwitchingBehaviorinEMEA
Q. As a result of your experience with fraud, did you change your
financial institution or credit card company?
UAE (n=76)
70%
30%
Italy (n=79)
82%
18%
Spain (n=79)
82%
18%
United Kingdom
(n=86)
83%
17%
Sweden (n=42)
83%
17%
South Africa
(n=98)
84%
16%
Germany (n=53)
87%
13%
France (n=88)
90%
10%
The Netherlands
(n=41)
90%
10%
Hungary (n=27)
93%
No, I did not
7%
Yes, I did
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Notallunhappyconsumersswitchfinancialinstitutionsafterexperiencingfraud,buttheycan
stillnegativelyimpacttheirfinancialinstitution’srevenuebyusingtheircardlessoften.Itcan
becomea“let’sjustbefriends”typeofrelationship.Inmanycases,thereisachangeinwallet
positiononlyincertainsituations(Figure27andFigure28).Whilenotincludedinthesurvey
questions,anecdotalevidencesuggestsconsumerswilloftenchooseanalternativecardfor
onlinepurchasesandaseparateoneforPOSones.Thisquiterightlyispresentedtoconsumers
asabestpracticetosegmentfordifferenttypesofriskinstorescomparedtoonline.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
32
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure27:Back-of-WalletBehaviorinEurozone
Q. When you experienced fraud, did you choose to use cash or an
alternative payment method over a credit or debit card following the card
fraud incident?
Italy (n=79) 3%
41%
Spain (n=79)
46%
46%
Germany (n=53)
4%
The Netherlands
(n=41)
2%
11%
49%
49%
32%
54%
France (n=88)
5%
15%
32%
12%
65%
Used cash instead
of my debit card,
but not instead
of my credit card
33%
No
Yes, but only
in some situations
2%
Yes, in all
situations
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure28:Back-of-WalletBehaviorinEMEA(Non-Eurozone)
Q. When you experienced fraud, did you choose to use cash or an
alternative payment method over a credit or debit card following the card
fraud incident?
UAE (n=76) 3%
Sweden (n=42)
2%
Hungary (n=27) 4%
21%
58%
38%
18%
45%
14%
48%
South Africa
4%
(n=98)
United Kingdom
5%
(n=86)
Used cash instead
of my debit card,
but not instead
of my credit card
48%
55%
32%
64%
No
9%
24%
Yes, but only
in some situations
7%
Yes, in all
situations
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
CO N S U M E R AT T I T U D E S TO WA R D F R A U D Lessthanone-thirdofconsumersacrossEMEAhaveabsoluteconfidencethattheirfinancial
institutioncanprotectthemfromfraud,thoughinallcountriesatleast60%believethe
institutionsaredoingwhattheycantoprotectthem.Sweden,SouthAfrica,andtheNetherlands
havesomeofthelowestratesofconfidence(Figure29andFigure30).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
33
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure29:Consumers’TrustinFinancialInstitutionsinEurozone
Q. Do you have confidence in your financial institution to protect you
from card fraud?
Germany (n=296)
Spain (n=290)
France (n=289)
11%
65%
6% 10%
21%
59%
15%
25%
66%
Italy (n=294)
16%
The Netherlands
(n=297)
19%
No, I have very
little confidence
they can
17%
53%
28%
68%
Not really,
they could
do more
Yes, to an extent,
they're doing
what they can
11%
Yes,
absolute
confidence
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Figure30:Consumers’TrustinFinancialInstitutionsinEMEA(Non-Eurozone)
Q. Do you have confidence in your financial institution to protect you
from card fraud?
Hungary (n=294)
5% 5%
51%
United Kingdom
2%9%
(n=295)
69%
UAE (n=279) 3% 10%
9%
No, I have very
little confidence
they can
20%
54%
South Africa
4% 12%
(n=295)
Sweden (n=296)
39%
33%
58%
16%
27%
59%
Not really,
they could
do more
Yes, to an extent,
they're doing
what they can
16%
Yes,
absolute
confidence
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Consumersareunderstandablyconcernedaboutawiderangeoffinancialfraudtypes.The
majorityofconsumersareveryconcernedaboutidentitytheft,databreachesresultingin
compromisedaccountnumbers,onlinebankingfraud,andfraudoncreditanddebitcards.Many
consumersinEMEAarenotveryconcernedwithcheckfraud,aschecksaregenerallyutilizedless
thaninNorthAmericaandsomeothercountries.Thereiscertainlyafairbitofconcernabout
themobilechannel;asmoreoptionsbecomeavailableandmoreconsumersusemobile
payments,thesenumbersarelikelytorise(Figure31andFigure32).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
34
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure31:Consumers’FraudConcernsinEurozone
Percentage of Consumers Who Are Very Concerned About Fraud Types in EMEA
Identity theft
75%
63%
35%
54%
26%
70%
35%
Online banking fraud
23%
53%
44%
65%
63%
29%
Fraud on my credit card
48%
14%
56%
40%
16%
65%
60%
35%
31%
25%
6%
47%
24%
18%
14%
9%
The Netherlands
(n=300)
Spain (n=303)
45%
17%
Mobile wallets, or electronic purses
such as using PayPal on a phone, or
using Apple Pay, Google Pay, or
making in-app purchases
Italy (n=304)
47%
25%
Direct debit fraud (auto payment from
account)
France (n=304)
Germany (n=301)
65%
19%
Fraud on my debit card
Fraud on my prepaid card
55%
24%
Data breach resulting in compromised
account numbers
Cheque/check fraud
67%
35%
35%
36%
29%
22%
35%
34%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
35
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure32:Consumers’FraudConcernsinEMEA(Non-Eurozone)
Percentage of Consumer Who Are "Very Concerned" about Fraud Types in EMEA
43%
31%
Identity theft
70%
60%
42%
26%
Data breach resulting in compromised account
numbers
66%
62%
65%
68%
62%
38%
24%
Fraud on my debit card
23%
Fraud on my credit card
76%
39%
21%
Online banking fraud
59%
62%
62%
33%
59%
81%
57%
Mobile wallets, or electronic purses such as
using PayPal on a phone, or using ApplePay,
Google Pay, or making in app purchases
Cheque/check fraud
Fraud on my prepaid card
34%
16%
Direct debit fraud (auto payment from account)
12%
64%
60%
55%
25%
16%
11%
13%
UK (n=300)
Sweden (n=302)
40%
49%
5%
80%
70%
South Africa (n=303)
Hungary (n=303)
UAE (n=300)
39%
42%
48%
26%
46%
56%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
36
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
FR A UDINTHEA SIA -PA CIFIC
ThefinalregioncoveredbytheconsumerfraudstudyistheAsia-Pacific,withsixcountries
includedin2016.Consumerbehaviorandattitudesinthisregionaresomewhatdifferentthanin
EMEAandtheAmericas.
R I S K Y B E H AV I O R ConsumerbehaviorinAustraliaandNewZealandtendstobefarlessriskythanintherestofthe
Asia-Pacific.Thismaybeattributabletorelativelymorematurecardpaymentsmarketsand
fraudcontrols.Thefaster-growingandmaturingmarkets,suchasThailand,Indonesia,andIndia,
tendtoshowgreaterlevelsofriskybehavior.
TheverylowpercentagesofAustralianandNewZealandconsumerswhocarrytheirPINwitha
cardorrespondtoemailsandcallsaskingforbankaccountinformationmorecloselyresemble
consumersintheAmericasandEMEAthaninotherAsia-Pacificcountries.Largepercentagesof
consumersinallcountriesleavesmartphonesunlockedwhennotinuseandthrowdocuments
withbankaccountnumbersinthebin.
Thepatterntendstoholdthatfast-growingThailand,India,andIndonesiaexhibitsomeofthe
highest-riskbehaviors.Muchofthismightbeattributedtolessconsumereducationand
experiencewithpaymentcards.InallcountriesexceptAustraliaandNewZealand,over20%of
consumersbankorshoponlineoncomputerswithoutsecuritysoftwareoronpubliccomputers
(Figure33).Inanumberofcountries—again,thosegrowingquickly—consumersgenerallydo
nothavestrongbroadbandconnectionsathome,andmanyconsumersrelyoninternetcafes
whenactivescannotbecompletedonamobiledevice.Forexample,internetcafesarevery
popularinThailandamonglocalsandtourists,andsomeneighborhoodsseemtohaveoneon
everycorner.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
37
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure33:RiskyBehaviorintheAsia-Pacific
Q. Which of the following have you done in the past 5 years?
23%
35%
Thrown papers or
documents with account
numbers (e.g., bank
statements) in the trash bin
22%
34%
28%
30%
15%
24%
34%
31%
26%
36%
Left smartphone unlocked
when not using it
Australia (n=300)
Singapore (n=303)
11%
India (n=300)
19%
Used online banking or
internet shopping without
security software or on a
public computer
Indonesia (n=300)
30%
29%
New Zealand (n=301)
10%
43%
Thailand (n=300)
5%
Responded to emails or
calls asking for bank
details
10%
20%
19%
3%
25%
Made a note of your PIN
and carried it with you or
kept it with your card
7%
12%
19%
21%
4%
19%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
TheAsia-Pacificdoesnotshowcleartrendsforgrowthordeclineinriskybehaviors.Itisclear
thatmorematuremarkets,suchasNewZealandandAustralia,demonstratelowerincidenceof
riskybehavior.2016ratesarerelativelysimilarto2014ones,however.Thisimpliesan
opportunityforconsumereducationspecificallyfocusedonhowcustomers’behavioraffectsthe
potentialforfraud(Figure34).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
38
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure34:RiskyBehaviorTrendsintheAsia-Pacific
Risky Behavior Trends Over 2014 and 2016
36%
29%
34%
22%
20%
31%
30%
28%
22%
25%
2014
(n=310)
28%
16%
31%
25%
32%
19%
14%
27%
29%
37%
34%
24%
37%
24%
10%
19%
13%
35%
19%
15%
21%
14%
12%
2016
(n=300)
2014
(n=330)
2016
(n=300)
2014
(n=311)
2016
(n=303)
India
Indonesia
20%
Singapore
32%
4%
2014
(n=310)
43%
26%
8%
15%
5%
11%
28%
23%
23%
4%
2016
(n=301)
6%
2014
(n=310)
7%
10%
New Zealand
21%
2016
(n=300)
Australia
30%
19%
2016
(n=300)
Thailand
Left smartphone unlocked when not using it
Responded to emails or calls asking for bank details
Used online banking or internet shopping without security software or on a public computer
Thrown papers or documents with account numbers (e.g., bank statements) in the trash bin
Made a note of your PIN and carried it with you or kept it with your card
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
IneverycountryoftheAsia-Pacificregion,riskybehaviorandexperiencingfraudclearly
correlate.ThisismostclearinIndia,Thailand,andIndonesia.Again,educatingconsumersabout
riskybehaviorsandtheneedtoavoidthemaswellasalternativebehaviors(suchasLinux
installationsthatcanrunoffaUSBkey)canhelpreducefraudincidentsandhelpconsumersfeel
someelementofconfidenceintheirabilitytoprotectthemselvesfromfraud(Figure35).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
39
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure35:RiskyBehaviorandFraudExperiencedintheAsia-Pacific
Thailand
New
Zealand
Indonesia
India
Singapore
Australia
Fraud Experienced by Respondents Who Did and Did Not Participate in Risky
Behavior in the Asia-Pacific
Did not engage in risky
behavior (n=170)
Engaged in risky
behavior (n=125)
Did not engage in risky
behavior (n=100)
Engaged in risky
behavior (n=191)
64%
54%
46%
65%
35%
62%
38%
Did not engage in risky
behavior (n=78)
Engaged in risky
behavior (n=204)
36%
82%
55%
45%
Did not engage in risky
behavior (n=55)
Engaged in risky
behavior (n=213)
89%
69%
Did not engage in risky
behavior (n=142)
Engaged in risky
behavior(n=153)
11%
31%
85%
75%
Did not engage in risky
behavior (n=54)
Engaged in risky
behavior (n=210)
18%
15%
25%
91%
73%
Have not experienced card fraud
9%
27%
Have experienced card fraud
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
REPLACEMENTCARDS
IntheAsia-Pacificregion,consumerswhoreceivedatleastonereplacementcardrangefroma
lowof14%inThailandtoalmost34%inSingapore.Thismaybeareflectionoftargetedfraud
attacksanddatabreachespointedtomoreaffluentregionssuchasSingapore,India,Australia,
andNewZealand.Asinotherregions,someconsumersreceivedmultiplereplacementcards
duringthepastyear(Figure36).
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
40
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure36:ReplacementCardsintheAsia-Pacific
Q. Has your financial institution sent a new debit, credit, or prepaid card
to you during the past year because of a data breach or fraudulent
activity?
Singapore (n=291)
66%
India (n=282)
26%
69%
Australia (n=295)
72%
Indonesia (n=268)
79%
7%
24%
4%
21%
6%
17%
New Zealand
(n=295)
85%
14%
Thailand (n=264)
86%
13%
No
Yes, once
Yes, twice
Yes, 3 times
Yes, more than 3 times
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
ManyconsumersacrosstheAsia-Pacificregionusedreplacementcardslessthantheoriginal
cards.Thisback-of-walletbehavioroccurredatveryhighratescomparedtootherregions—from
31%inAustraliato74%inThailand.Thisbehaviorrepresentslostrevenueforfinancial
institutionsandsurelyshowsconsumers’lackofconfidenceaswellasanincreasingvarietyof
noncard-basedpaymentoptionsavailabletoconsumers(Figure37).
Figure37:UseofReplacementCardsintheAsia-Pacific
Percentage of Respondents in the Asia-Pacific Who Use Their
Replacement Card Less as a Result of Fraud or a Breach
74%
62%
58%
36%
Thailand (n=38)
India (n=87)
Indonesia
(n=55)
Singapore
(n=98)
36%
31%
New Zealand Australia (n=84)
(n=45)
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
41
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Consumersatisfactionrateswithfinancialinstitutions’aftercareexperiencevarydramaticallyby
country.InAustralia,85%ofconsumerswereatleastsomewhathappyafterafraudexperience,
andinNewZealand,77%wereatleastsomewhathappy.Intheothercountries,high
percentagesofconsumerswereunhappyaftertheirfraudexperience:40%wereatleast
somewhatunhappyinSingapore(increasedfrom33%in2014),48%inIndia,and42%in
Indonesia(Figure38).Inmanycases,customeraftercareisstillevolving,asisthesophistication
ofcardfraudmonitoringinthegrowingeconomies.Thisisagainclearcomparedtothemore
maturemarketsinAustraliaandNewZealand.
Figure38:SatisfactionWithFinancialInstitutionAfterFraudintheAsia-Pacific
Q. How happy were you with the treatment from your financial institution
when you experienced card fraud?
Australia (n=119)
New Zealand
(n=60)
10%
17%
India (n=106)
20%
Indonesia (n=71)
18%
Singapore (n=107)
Thailand (n=62)
33%
7%
13%
11%
Very unhappy
52%
37%
28%
24%
27%
26%
Somewhat unhappy
40%
36%
44%
48%
55%
Somewhat happy
16%
14%
12%
8%
Very happy
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Comparedtootherregions,theAsia-Pacific’sswitchingratesareratherhigh.InThailand,India,
andIndonesia,between44%and48%ofconsumersswitchfinancialinstitutionsaftertheirfraud
experience.Theseveryhighratesofcustomerattritionareverycostlytofinancialinstitutions.In
Singapore,21%ofconsumersswitchfinancialinstitutionsafterexperiencingfraud,muchgreater
thaninAustraliaandNewZealand.Thisistroubling,asSingaporeisawealthycountrywithwellestablishedglobalbanks,regulations,andtechnologytools.
AustraliaandNewZealandhavethelowestratesofswitchingbehavior,at13%and8%,
respectively,whichismuchmoresimilartoNorthAmericaandWesternEuropethanotherparts
oftheAsia-Pacific(Figure39).MuchlikeintheAmericas,theremaybemorestickinesswith
consumersinAustraliaandNewZealandduetomorein-depthrelationshipsviamultiple
products,whereasconsumersinthegrowingeconomiesmayhavemorewillingnesstoswitch
andarelesscloselytiedtoagiveninstitution.ThereisanopportunityinThailand,India,and
Indonesiatocreatestickiermultiproductrelationshipsandloyaltyprograms.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
42
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure39:SwitchingBehaviorintheAsia-Pacific
Q. As a result of your experience with fraud, did you change your
financial institution or credit card company?
Thailand (n=62)
52%
48%
India (n=106)
52%
48%
Indonesia (n=71)
56%
Singapore (n=107)
44%
79%
Australia (n=119)
21%
87%
New Zealand
(n=60)
13%
92%
8%
No, I did not
Yes, I did
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Somewhatsurprisingly,countrieswithhigherfraudratesandlowerlevelsofcustomeraftercare
donotshowparticularlyhighratesofmovingcardstobackofwallet.Indonesia,Thailand,and
Indiashowlargeproportionsofconsumerswhoonlychangewalletpositionbehaviorinsome
situations(Figure40).
Figure40:Back-of-WalletBehaviorintheAsia-Pacific
Q. When you experienced fraud, did you choose to use cash or an
alternative payment method over a credit or debit card following the card
fraud incident?
Indonesia (n=71)
4%
India (n=106)
Thailand (n=62)
14%
69%
18%
10%
58%
13%
Singapore (n=107) 2%
23%
56%
49%
Australia (n=119) 3%
13%
38%
54%
New Zealand
3%
(n=60)
21%
31%
68%
Used cash instead
of my debit card,
but not instead
of my credit card
11%
No
12%
23%
Yes, but only
in some situations
5%
Yes, in all
situations
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
43
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
CO N S U M E R AT T I T U D E S TO WA R D F R A U D Muchlikeotherregions,theAsia-Pacificenjoysastrongconsumersentimentthatfinancial
institutionsareatleastdoingthebesttheycantopreventfraud(Figure41).Singaporeand
Thailandhavethelowestlevelsofconfidence,witheachshowinga15%unfavorableview.Asin
othergeographies,marketinganddemonstratingtocustomersthecontrolsandtechnologies
thatareinplacecanimprovecustomersatisfaction.
Figure41:Consumers’TrustinFinancialInstitutionsintheAsia-Pacific
Q. Do you have confidence in your financial institution to protect you
from card fraud?
India (n=282)
6%
New Zealand
(n=295)
7%
Australia (n=295)
7%
Indonesia (n=268)
3% 9%
Thailand (n=264)
13%
Singapore (n=291)
13%
No, I have very
little confidence
they can
49%
45%
70%
22%
64%
27%
59%
29%
60%
25%
71%
Not really,
they could
do more
Yes, to an extent,
they're doing
what they can
14%
Yes,
absolute
confidence
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
Acrossallcountries,consumersintheAsia-Pacificaremostconcernedaboutidentitytheft,data
breachesresultingincompromisedaccountnumbers,andonlinebankingfraud(Figure42).
Singaporestandsoutasmostconcernedinnearlyeverycategory,whichreflectsthese
consumers’relativelylowconfidencethatinstitutionsareprotectingthemcomparedtothe
confidenceofconsumersinothercountries.CheckfraudismuchmoreofaconcerninIndia,
Singapore,andIndonesiathaninmostofEMEA,aschecksaremorecommonlyusedintheAsiaPacificcomparedtomostofEMEA.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
44
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
Figure42:Consumers’FraudConcernsintheAsia-Pacific
Percentage of Consumer Who Are "Very Concerned" about Fraud Types in The AsiaPacific
50%
72%
Data breach resulting in compromised account
62%
75%
numbers
38%
53%
47%
69%
65%
Identity theft
73%
35%
38%
43%
71%
66%
Online banking fraud
65%
34%
47%
37%
68%
58%
Fraud on my credit card
65%
32%
45%
33%
Australia (n=295)
58%
64%
Fraud on my debit card
Singapore (n=291)
65%
24%
India (n=282)
44%
30%
Indonesia (n=268)
62%
62%
Direct debit fraud (auto payment from account)
New Zealand (n=295)
61%
26%
Thailand (n=264)
37%
30%
58%
Mobile wallets, or electronic purses such as
46%
using PayPal on a phone, or using ApplePay,
45%
Google Pay, or making in app purchases
31%
34%
15%
40%
56%
Cheque/check fraud
49%
13%
27%
16%
35%
47%
Fraud on my prepaid card
54%
13%
28%
Source:AiteGroup,ACIWorldwidestudyofconsumersin20countries,Q22016
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
45
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
R ECOM M ENDA TIONS
Whenconsumersarenotengagedinthefraud-preventionprocessandunawareofhowtheir
behaviorsputthematrisk,financialinstitutionsandconsumerssuffer.Thereisgreatmutual
benefitincreatingapartnershipwithconsumersbyprovidingeducationtoreducetheriskof
fraudinthefirstplace,thenhavingstrongaftercareprocesseswhenafrauddoesoccur.Doingso
canbothreducecostsandpreserverevenue.
Atthesametime,inthecaseofdatabreachesorskimming,thereislittleifanythingthe
institutionorconsumercando.Helpingconsumersunderstandthattheseeventsarenotalways
theinstitution’sfaultandcommunicatingclearlywhatactionsarebeingtakencangoalongway
towardimprovingconsumerconfidence.
Forfinancialinstitutions:
•
Customereducationandparticipation:Thiscancomeinmanyforms,suchasonthe
websiteormobileapp,asapartofemailnotifications,community“shredit”days,
andthroughtheaftercareprocess.Ensuretheyhaveabasicunderstandingofhow
theinstitutioniskeepingthemsafe,too.
•
Offerexamplecases:Manyconsumersdorealizesomeoftheirbehaviorsarerisky
anddon’tnecessarilyknowwhatalternativesareavailabletothem.Oneapproachis
tocreateashortstoryexplainingtheriskybehavior,thepotentialforfraud,and
alternativeactions.Thiscanbringthemessagehometoconsumers.Forexample,
consumerswhoneedtouseinternetcafesorotherinsecureconnectionscanbe
instructedonhowtouseaUSB-basedLinuxinstancetorunmoresecuresessions.
AnotherexampleishelpinguserscreateamnemonictohelprememberPINsand
passwords.
•
Communicateclearlyandsimply:Ensureconsumersunderstandthereasonfora
replacementcard,thatitissafetouse,andwhyitissafetouse.Makefraud
protectioneffortseasytounderstandandeasilyavailable,withoutexposingtoo
muchinformationtofraudsters.Explainclearlywhythecardwasreissued—because
offraud,toreplacestripewithchip,oraspartofthegeneralexpirycycle.
•
Focusoncustomerexperience:Afterexperiencingfraud,consumersareoften
emotional.Trainagentstobeempatheticandhelpfultothegreatestextentpossible
toretainvictimizedcustomers.Remindagentsthatwhiletheyworkonfraudcases
everyday,thecustomerontheotherenddoesn’thavethatexperience.
•
Focusonlayersofsecurity:Thereisno“silverbullet”solution,butconsiderhow
toolslike3-DSecure,transactionmonitoring,andbiometricauthenticationcould
enhancebothsecurityandcustomerservice.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
46
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
R ELA TEDA ITEGR OUPR ESEA R CH
CombatingFraud:ConsumerPreferences,January2016.
NotYourFather’s3-DSecure:AddressingtheRisingTideofCNPFraud,February2016.
EMV:IssuanceTrajectoryandImpactonAccountTakeoverandCNP,May2016.
Digital-ChannelFraudMitigation:TheMobileForceAwakens,June2015.
PaymentCards:CurrentThreatsandProtections,September2014.
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
47
2016GlobalConsumerCardFraud:WhereCardFraudIsComingFrom
July2016
A B OUTA ITEGR OUP
AiteGroupisaglobalresearchandadvisoryfirmdeliveringcomprehensive,actionableadviceon
business,technology,andregulatoryissuesandtheirimpactonthefinancialservicesindustry.
Withexpertiseinbanking,payments,insurance,wealthmanagement,andthecapitalmarkets,
weguidefinancialinstitutions,technologyproviders,andconsultingfirmsworldwide.We
partnerwithourclients,revealingtheirblindspotsanddeliveringinsightstomaketheir
businessessmarterandstronger.VisitusonthewebandconnectwithusonTwitterand
LinkedIn.
A U T H O R I N F O R M AT I O N BenKnieff
+1.617.398.5096
[email protected]
CO N TA C T Formoreinformationonresearchandconsultingservices,pleasecontact:
AiteGroupSales
+1.617.338.6050
[email protected]
Forallpressandconferenceinquiries,pleasecontact:
AiteGroupPR
+1.617.398.5048
[email protected]
Forallotherinquiries,pleasecontact:
[email protected]
©2016AiteGroupLLC.Allrightsreserved.Reproductionofthisreportbyanymeansisstrictlyprohibited.
101ArchStreet,Suite501,Boston,MA02110•Tel+1.617.338.6050•Fax+1.617.338.6078•[email protected]•www.aitegroup.com
48