Smartphones have become a ubiquitous part of life for consumers around the globe. They use their mobile devices for everything from checking the weather to posting on social media to pulling up real-time maps and using them to navigate to new destinations. Many of these activities are made possible by location sharing, which allows users to divulge their true geographic locations with apps and services providers as they see fit.
Location sharing commonly allows consumers to take part in activities such as ordering grocery deliveries, hailing Uber rides and receiving extremely accurate weather alerts and details. There are other benefits that the function could provide, however, including more robust fraud protection. Being granted access to their customers’ true geographic locations could give financial institutions (FIs) crucial access to data that could protect consumers’ accounts, especially as more of them use mobile channels to shop and pay.
However, a sizable share of consumers are still reluctant to allow their FIs to access their location data despite these clear benefits. PYMNTS’ research shows that 28 percent of consumers are already sharing their location details with their banks because they believe it will help the latter fight fraudulent activity. Thirty-two percent, however, are unwilling to allow their FIs to access this information, and 36 percent do not understand why their banks would require access to it.
How can banks better communicate the benefits of location sharing — and its vast potential to combat fraud — to customers who are on the fence?
This is one of the many questions we sought to answer in Location, Location, Location: How Location Data Can Help Banks Prevent Online Fraud, a PYMNTS and GeoGuard collaboration. The report surveyed 2,141 U.S. consumers who own internet-connected devices and who use their credit or debit cards at least monthly. We examined their willingness to share their locations with their card issuers as well as whether they would be willing to switch to FIs that leveraged geolocation tools to thwart fraud.
PYMNTS’ research reveals that roughly 55 percent of consumers — 138 million people — currently share their location data with at least one app, but just 21 percent of consumers say the same when it comes to mobile banking apps specifically. What’s more, nearly one-third of consumers — 82 million — are unwilling to share this information with their card issuers, with 35 percent of these consumers stating that they do not know why their banks would need access to such information.
There are signs that FIs can better explain location sharing’s fraud-fi
ghting benefits to earn consumers’ trust, though. Our research shows that 49 percent of consumers would feel more comfortable sharing their information if their FIs explained that it would not be provided to third parties and that it would be used to better protect their accounts, for example. This is especially true for Generation X and millennial consumers, at 37 percent and 36 percent, respectively.
We also found that there is good reason for card issuers to provide location sharing-based fraud protection. Forty-two percent of consumers say they are at least “somewhat” likely to switch from their current FIs to providers that offer location-tracking capabilities to protect consumers from bad actors.
These are just a few of the findings illuminated by our research. For more insights, download the report.