Nearly 20% of consumers worldwide lack confidence that their banks can protect them from payment card fraud, yet nearly half do things that potentially expose them to fraud, new research says.
In addition, 27% of all cardholders, whether using a debit, credit or prepaid card, experienced fraud in the past five years, according to the survey by payment processor ACI Worldwide. In the U.S. alone, 41% of cardholders experienced fraud.
Aite Group analyzed data and developed the report from ACI's March and April research, which included nearly 6,200 responses from consumers in 20 different countries.
The initial report focuses on consumer confidence in banks in the wake of card fraud and a following report in July will focus on consumer feelings toward retailer security and how they prefer to be contacted by their banks.
The report finds that 63% of consumers who have experienced fraud use their card less than before the incident, and 43% who received replacement cards as a result of a data breach use the new card less than the original.
Because of those habits, banks, processors and retailers "have their work cut out for them" in continuing the fight against card fraud, says Michael Grillo, senior product marketing manager for ACI Worldwide.
"Banks have done some good things to fight fraud or respond to data breaches, and consumers are happy with some of those things, but the fight is not over and they are still going to need a layered approach to security," Grillo says.
Some consumers may make a better effort to protect themselves after learning about a data breach. But many could also view card fraud as an inevitable fact of life and leave it to their banks to protect their payment and personal data, Grillo says.
"Some may just look at this as the new norm, that card data is eventually going to be stolen," Grillo adds. "But banks need to educate them that much more can happen and that stolen data means more information can be used in a person's name to either apply for credit or engage in other activities."
Financial institutions are not engaging in ongoing education to alert their customers about security, says report author Shirley Inscoe, senior analyst with Aite Group.
"Financial institutions are missing the boat here because it is a great opportunity to educate consumers and get their cards to front of wallet, instead of back of wallet," Inscoe says.
It is a challenge for banks to determine the best way to communicate with their customers because fewer are getting paper statements or visiting the branch, Inscoe says. "But you can't do it one time [send a security message] and say you are done," she adds.
A financial institution that can "crack this nut first" and develop a successful security education campaign for its customers will cut down on attrition and also possibly steal customers from other banks, Inscoe says.
Of those consumers affected by a breach, 23% say they switched to another card issuer.
Any bank's education program would have much to cover.
Consumers continue to display at least some form of risky behavior, as up to 20% in some countries still carry a written note with their PIN in their wallets, and between 13% and 31% of consumers throughout the Middle East and Asia throw away unshredded papers containing their bank account numbers, the report states.
Other than in the Netherlands, the U.K. and France, up to 37% of consumers use computers without security software or use public computers for online banking or e-commerce.
In general, many consumers got "really spooked" by the data breach that occurred at Target and they are beginning to realize that no individual is above being affected by fraud, ACI's Grillo says.
"These criminals steal money at a high rate and put that money back into technology to make more attacks," Grillo adds. "They share the technology with one another and purchase stolen data from each other."