FICO survey shows a growing acceptance of security measures as online account opening surges
AUCKLAND, New Zealand, April 27, 2021 /PRNewswire/ — FICO’s identity proofing and digital banking survey shows identity theft is a tangible threat for people in New Zealand – 4 percent said they know their identity has been stolen and used by a fraudster to open an account, while a further 6 percent believe it is likely to have happened.
Consumer Survey New Zealand: Why do financial institutions need to check your identity? (PRNewsFoto/FICO)
The acknowledged level of risk from identity theft means there is a good understanding of why identity proofing is an integral part of the banking experience in New Zealand.
Understanding the need for ID proofing
Over three-quarters (79 percent) of respondents recognized that identity proofing happens for their protection. Most people are not cynical about the reasons their identity is confirmed. While 49 percent recognize there is an element of regulation driving providers to carry out more checks, only 8 percent think this is done to enable financial institutions to sell more.
A majority (68 percent) of New Zealand respondents did see identity proofing as a way for banks to protect themselves, while 51 percent regard it as a tool to prevent money laundering.
Most New Zealanders are open to providing their bank with a biometric such as a facial scan, fingerprint, or voiceprint to secure their accounts. The survey revealed that 20 percent are happy to provide this while a further 44 percent will do it once they understand why it’s necessary. 14 percent say that banks should never capture biometrics, while just 16 percent are willing but unhappy to provide them.
"In 1991 New Zealanders opposed a Kiwi Card universal identity as a privacy concern," said Subhashish Bose, lead for fraud, security and compliance in Asia Pacific. "So, it probably isn’t surprising that hesitancy and concern around biometrics remains higher with older New Zealanders. For example, in the 55-64 age group the survey showed that 19 percent believe a bank should never capture a biometric. By contrast, just 13 percent of 18–24-year-olds felt this way showing acceptance is generational."
New Zealand is embracing digital banking…branch visits are fading
In New Zealand, 61 percent of consumers prefer to open bank accounts digitally while 26 percent prefer branches. However, over the last year, thanks to the pandemic, 28 percent of New Zealanders are more likely to open an account digitally than a year ago; while those who attend branches often do so for perceived operational benefits.
"A concentration of banking services exists in New Zealand with four main players offering digital account opening," said Bose. "This has meant it has become both pervasive and a service that many New Zealanders have started using over the last few years. For those who prefer to go to a branch there is usually a need for more detailed information or a perception that it is more secure."
A strong preference towards mobile banking apps by younger New Zealanders means that this channel is essential for financial institutions looking to grow their share of the demographic. Banks who adopt successful multichannel strategies can adapt to this growing shift online.
Don’t ask me to jump through hoops
New Zealanders who open an account digitally, prefer to carry out the process entirely in their chosen channel whether it be smartphone or website. If customers are asked to move out of channel to prove their identities, many of them will abandon the application, either giving up on opening an account completely (5 to 6%) or by going to a competitor (10 to 14%). Of those who don’t immediately abandon, up to an additional 24 percent will delay the process.
The survey found that any disruption matters. Asking people to scan and email documents or use a separate identity portal causes almost as much application abandonment as asking them to visit branches or mail in documents.
This survey was conducted in January 2021 by an independent research company adhering to research industry standards. 1,000 New Zealand adults were surveyed, along with 13,000 consumers in the USA, UK, Canada, South Africa, Australia, Indonesia, Malaysia, The Philippines, Vietnam, Thailand, Brazil, Colombia and Mexico.
FICO (NYSE: FICO) will discuss the results in a session at its free virtual event Success Realized: Digital Transformation Delivered (APAC), which runs April 27-29, 2021.
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