Scams and identity fraud in Australia are increasing rapidly, reaching industrial levels, warns GBG, a global digital identity expert.
Their report, the Global State of Digital Identity 2023, reveals that one out of every ten Australian smartphone owners surveyed has fallen victim to identity fraud in the past year. Additionally, 94 per cent of respondents expressed concerns about future fraud attempts.
While Australian consumers generally feel secure when using smartphones for transactions like mobile banking and peer-to-peer payments, GBG’s research found that 69 per cent of them worry that their personal information, such as their name or bank account number, might be available for sale to criminals on the internet. The majority of respondents (86 per cent) believe it is the responsibility of businesses they interact with to protect their data, but nearly as many (80 per cent) feel they should also take some responsibility themselves.
Carol Chris, Regional General Manager for Australia & New Zealand at GBG, emphasised the growing threat of fraud in Australia and the impact it has on individuals and businesses. She urged businesses to remain vigilant against fraudsters and scammers, particularly those pretending to be genuine customers. By ensuring the safety and security of their customers online, businesses can earn their trust.
According to the GBG research, more than half (56 per cent) of Australian businesses experienced known or suspected fraud attempts in the past year. Financial impact, brand reputation, and customer retention were the top concerns for these businesses. Identity takeover was identified as a significant fraud risk for 15 per cent of businesses, and 40 per cent noticed an increase in such cases in the last year. Identity takeover involves fraudsters combining stolen real identity information with fake details to create a new identity for illicit purposes.
Chris highlighted the importance of businesses demonstrating their commitment to protecting customer identities and preventing fraud. She noted that customers now prioritize security over speed when opening new accounts, and business leaders can gain a competitive advantage by building trust and implementing robust identity verification solutions.
The report also reveals that Australian consumers highly value their digital identity, with only 2 per cent considering no information to be important for their personal identity. They deem various types of private data essential, including driver’s license numbers (80 per cent), dates of birth (77 per cent), passports (67 per cent), mobile phone numbers (62 per cent), and biometric information (56 per cent). The study also found that 10 per cent of Australians surveyed experienced personal identity fraud in the past year.
When it comes to online accounts, Australian consumers tend to switch brands and show security-conscious behavior. Approximately 82 per cent signed up for new online accounts in the past year, and a significant majority switched to different brands. Credit card providers and loan companies experienced the most customer churn. More than 90 per cent of Australians would choose a brand over its competitors if it systematically reviewed transactions for fraudulent activity.
While Australian businesses aim to provide a frictionless onboarding experience, some consumers abandon the sign-up process due to factors like its lengthiness (32 per cent), complexity (27 per cent), or lack of required documents (17 per cent). However, businesses rate themselves at an average of six out of ten for providing a smooth onboarding experience, on par with global organizations.
To manage identity verification, Australian businesses are actively adopting technology. Around 78 per cent believe that good identity verification can be a strategic differentiator, leading 67 per cent of businesses to increase their budgets in this area. Popular solutions include address verification, identity document verification, and fraud checks. The majority of businesses (63 per cent) perform customer identity checks to reduce fraud, while 57 per cent do so to comply with regulations.
Many businesses struggle to assess the reliability of different datasets, and a significant number (71 per cent) are considering consolidating identity verification suppliers. Future-facing technologies such as artificial intelligence, machine learning, mobile device attribute verification, and digital identities are being considered for adoption over the next three years.
To download the full Global State of Digital Identity 2023 report, please visit here.