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Consumer confidence wavering in the face of growing fraud.

Consumer confidence wavering in the face of growing fraud.

Nic Nuske, Co-CEO of Vero Systems, explains why new cyber security solutions are needed, as consumer confidence falls due to increasing concerns about online, home and business security.

As organized fraud rings relentlessly develop new methods of stealing funds and identities, many consumers are increasingly losing confidence that there is anything that can be done to reverse this downward spiral. A recent study of customers found:

  • 23 percent changed financial institutions due to dissatisfaction after experiencing fraud
  • Nearly 2 in 10 lack confidence that their financial institution can protect them against fraud
  • 43 percent who received replacement cards as a result of data breach or fraudulent activity use their new card less than they used their original

“Consumers are increasingly concerned about fraud, and are losing confidence on a variety of levels,” said Mike Braatz, senior vice president of Payments Risk Management Solutions, ACI Worldwide. “They are unsure if their financial institutions can protect them against fraud; after experiencing fraud, they use replacement cards less often due to a loss of confidence in the card or card issuer; and post-fraud, they often change providers, or that card will go to the back of the wallet. This has immediate and long-term implications for customer loyalty, revenue and fee income.”

Extensive research by Telstra shows Australian consumers consider security of financial service providers crucial to their willingness to use online services. In one graphed result, ‘confidence in the security and privacy of financial interactions’ and ‘providers’ reputation for data security’ both scored highly as drivers of choice of financial service providers. However the process of providing identity to authenticate is an area of dissatisfaction, with ‘convenience of providing my identity to access my accounts’ scoring much lower.

Security issues come into our home, car and life

Online financial security is not the only issue. As more people purchase smart internet devices for their homes such as fridges, cleaning robots, TV’s and also cars, security issues will have an even larger impact than ever before, because they will be in our homes and affecting daily life like never before. The potential for disruption to thousands of households, even possibly affecting driving safety, may also impact consumer behaviour dramatically.

And it is not just individual consumer confidence that is affected. New research has revealed that security concerns are putting businesses off adopting Internet of Things (IoT) initiatives, with 50 per cent of IT business leaders citing “increased exposure of data” and “information security” as the biggest barriers.

Consumers, whether individual or business, value relationships grounded in security, privacy and flexibility, and ones that are real-time, multi-channel, customised, emotionally connected, personalised, predictive and automated – and they’re open to whoever can provide it.

Adapting to the fast pace of change online and in both home and business, and the security issues that come with these changes, is the cyber challenge of our time. Companies like Vero systems are constantly searching for and developing new ways and products to tackle these cyber security issues, in order to restore the consumer and business confidence so necessary for success in many industries.

How is consumer confidence affecting your business?

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