PYMNTS-MonitorEdge-May-2024

Consumers Willing to Trade Convenience to Better Protect Private Data

Consumers across age, income and lifestyle demographics are concerned about the safety of their personal information.

When it comes to consumer-facing sectors such as retail or banking, convenience isn’t always king. In retail, deals or customer service may take precedence. For banks, credit unions and other FIs, it is clear that security tops all else.  These fraud protection sentiments are borne out in proprietary data prepared for the PYMNTS collaboration with Entersekt, “Visible and Invisible Security: Perceptions in Digital Banking.”

Source: PYMNTS

Proprietary data

N = 2,584: Complete responses, fielded Sept. 26, 2022 – Oct. 3, 2022

We found that 69% of surveyed consumers overall said they were at least somewhat concerned about the security of their own data, with 40% expressing they were very or extremely concerned. Additionally, 62% of consumers surveyed said they were willing to gain security by giving up conveniences. This represents a double-digit lead over the 33% who were satisfied with the convenience–security balance when it comes to their private data and 12 times higher than those seeking more convenience.

To be fair, consumers have been voicing this demand for a long while. One-third of surveyed millennials believe their banks could do more in providing security, and 50% of consumers say their FIs should do more when it comes to online security specifically. It’s no wonder these concerns are being voiced, as the Federal Trade Commission estimates consumers lost $8.8 billion to fraud in 2022, representing a 30% rise from the previous year.

However, convenience can’t totally be tossed out the window, either. A better balance might be found in what some have dubbed “intelligent friction.” Intelligent friction includes contextual awareness through advanced authentication technologies, assisting FIs’ legitimate customer transactions through risk-based analysis. This tech includes biometrics such as fingerprint and facial recognition, along with multi-factor authentication.

Gerhard Oosthuizen, chief technology officer of Entersekt, noted in a PYMNTS interview that cooperation between banks may be crucial in meeting these goals. “I think we need to see how banks can work together better and save costs by collaborating,” he said. “Where the crisis is big enough, banks can rally, and we’re definitely seeing a larger spirit of collaboration today, even putting data into consortiums so organizations can get a herd protection in place. While we’re not yet at a technology level where there’s an industry standard for security, the awareness and the cooperation is going to make a difference because ultimately the fraudsters are there to find the one open door, the weakest link, and I think this is a wakeup call for the community to band together and help each other out.”

Consumers have made it clear that they prioritize security over all else when it comes to their personal data. It’s up to FIs to listen accordingly.

PYMNTS-MonitorEdge-May-2024