Worldwide Unisys ID Fraud Study Shows New U.S. Consumer Security Concerns

Americans are more willing to pay additional fees for greater protection of their bank accounts to assuage increasing fears, according to new research from Unisys Corporation that polled 1,000 Americans as part of a broader worldwide analysis of identity fraud and bank security issues.

The study, which may be the first-ever worldwide comparison of consumer views on these growing global concerns, revealed a significant rise in Americans’ willingness to pay additional bank fees for greater security protection. Nearly 40 percent of Americans are at least somewhat willing to pay fees for more protection compared to 27 percent in a similar U.S. survey conducted by Unisys in 2004. Even a larger number (50 percent) would consider switching banks for more protection compared to 45 percent last year.

“Our research shows U.S. banks lead in some areas of consumer education on ID fraud as compared to their worldwide counterparts but clearly there’s still a long way to go to make Americans feel secure about their banks’ business operations,” said Dominick Cavuoto, corporate vice president and president of the Global Financial Services Practice at Unisys. “People are clearly worried, reinforced by the fact that they’re even more willing than ever to leave their banks and pay for security protection. This consumer perception will likely drive banks to quickly adopt advanced security solutions or risk losing existing and potential costumers, revenue streams and brand reputation.”

Concern about fraud and security issues continues to increase among U.S. consumers. Almost three quarters (73 percent) worry about the fraudulent use of their bank accounts or credit cards. The 2004 Unisys study found that only 51 percent expressed at least some concern about the safety of their bank accounts.

“With all the attention to ID fraud in the media and in the government, Americans are learning more which is a positive step to combat the problem, especially if financial institutions also encourage and capitalize on this knowledge effectively,” Cavuoto said. “Banks need visibility into all fraud across their own operations and beyond, sharing data industry-wide to better deter fraud earlier.”

The worldwide Unisys research also examined consumer views in the United Kingdom, France, Germany, Brazil, Mexico, Australia and Hong Kong. Other key U.S. findings include:

• The U.S. leads the world in ID fraud instances with 17 percent of consumers citing they have been victims, followed by the U.K. (11 percent), Brazil (9 percent), Mexico (8 percent), France (8 percent), Australia (7 percent), Germany (3 percent) and Hong Kong (1 percent).
• The aggravation of dealing with the fraud virtually equals loss of money as leading concern associated with ID fraud. A surprising 25 percent of Americans say the time and effort to fix the problem is their top concern compared to 26 percent who cite loss of their funds. The United States leads the rest of the world in concern about aggravation over rectifying identity fraud cases, likely influenced by personal experience due to higher victim rates.
• Two in five (42 percent) Americans report receiving information from their banks about “phishing” (email fraud attacks that mimic bank sites), with U.S. banks significantly better at communicating with customers than their counterparts in other countries. At the same time, 50 percent of U.S. consumers say they would like to receive more information from their financial institution about security and fraud protection.
• Biometrics (e.g., iris or fingerprint scans) is the preferred method to fight fraud and identity theft, cited by 64 percent of U.S. consumers, followed by smart cards (36 percent), tokens (23 percent), and more passwords (17 percent).

“To better deter fraud, banks need more visibility across their risk monitoring applications to develop a common framework through which multiple business units and detection systems can collaborate and coordinate their activities,” Cavuoto said. “Banks have great resources at their fingertips to fight ID fraud, but the trick is to unify the power of many separate tools that they use today.”

About the research
Telephone surveys were conducted on behalf of Unisys among households in Australia, Brazil, France, Germany, Hong Kong, Mexico and the United States between July 29 and August 22, 2005, and among U.K. households from June 17-19, 2005. Of the 8,339 men and women aged 18 to 65 who were surveyed, 6,492 qualified for the identity fraud questions on the basis of having an account or credit card with a bank or other financial institution. The omnibus survey data are weighted to provide nationally representative and projectable estimates of the populations, and balanced by key demographics such as age, sex, region and education.

Unisys will officially launch the ID fraud research at the Bank Administration Institute’s Retail Delivery Show (Booth # 543) in Orlando, Florida on November 15-18, 2005. Additional research results include global data on online banking and consumers’ views of methods of self-protection against identity fraud, as well as comparative data among the countries.