There are many actions financial institutions can take to strengthen their defenses against fraud, such as equipping themselves with the latest machine learning and analytics solutions to identify threats before they have a major impact.
However, it’s often said that the weakest link in the banking security chain is the customer. Even the most diligent efforts on the part of the bank can be undermined by poor practices by customers, such as using weak passwords or failing to protect sensitive data.
With this in mind, could stronger customer engagement and education be the key to staying one step ahead of the fraudsters?
The emotional implications of fraud
When it comes to engaging with customers about the threat of fraud and protecting against it, one of the most important considerations for banks is the emotional side of this issue.
Customers who have never been affected by fraud might not want to consider it as a possibility, or could adopt the “It won’t happen to me” philosophy, while those who have experienced it may feel uncomfortable discussing the subject.
A recent survey conducted in the UK by Barclays found that a third (34 percent) of respondents had been a victim of fraud, but a quarter of this group were too embarrassed to speak up about it. This has resulted in a third (34 percent) of fraud cases not being reported to banks and nearly three-quarters (72 percent) going unreported to the police.
The study found that some of the most common emotional responses to experiencing fraud are feeling stupid (31 percent), victimized (23 percent), helpless (13 percent) and gullible (12 percent).
Barclays has responded to this problem by launching the Embarrassing Fraud Clinic, which will visit London, Manchester and Glasgow, giving members of the public access to a range of free information and knowledge. The bank has also incorporated a fraud intervention service into its online banking, providing more support to people who have been tricked into transferring money to fraudsters.
Ashok Vaswani, CEO of Barclays UK, said: “We want to encourage people to talk more openly about scams, so that we can work together to lift the stigma of fraud. If people are too embarrassed to even tell their friends and family, then how can we expect them to report it to their banks?”
Optimizing customer engagement to fight fraud
Having more open, effective lines of communication with customers aids the fight against fraud by helping people to feel more comfortable in reporting it. Furthermore, banks that have strong engagement with customers will have a better chance of getting their message across about good fraud prevention habits. They could enjoy enhanced brand loyalty, too.
So what methods and processes can you put in place to improve how you engage and communicate with consumers? Here are a few possibilities:
- Engage with people via their preferred channel – By dividing your customers into groups based on their preferred method of engagement, you can maximize the possibility of your message getting through. Young, mobile-first consumers could be most likely to acknowledge messages sent via their banking app, for example, while older individuals might prefer a face-to-face conversation.
- Invest in a personalized approach – Personalization can be extremely important, particularly when you are discussing a sensitive subject like fraud, because it shows that you are acknowledging the customer as an individual and recognizing their needs. There are various ways to enhance personalization, such as sending bespoke messages via the ATM channel and inviting consumers to customize their app.
- Turn technology to your advantage – With the emergence of technologies such as chatbots and the ongoing growth of social media and other communication channels, banks have more ways to communicate with the public than ever before. It will become increasingly important to make effective use of these platforms, so long as they don’t come at the expense of personal, relevant customer service.
- Follow up – If a customer has approached you, either to report fraud or to simply discuss or ask a question about the subject, it’s absolutely crucial to follow this up and use it as an opportunity to start a productive dialogue. People who are more engaged with their bank are much more likely to be aware of threats and to take action to protect themselves, which is good for all parties.
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