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Dodgy website passwords driving UK fraud spike

Almost one fifth (17%) of UK adults have been the victim of fraud in the last 12 months, according to new research from Nuance 

The global study – which polled 10,000 adults across the US, UK, Australia, Germany, France, Belgium and the Netherlands, Sweden, Italy, Spain, and Mexico – also found that the average cost for these victims is nearly £3,300. This is triple the amount typically lost to fraud in 2019, which was then costing £1,000 per victim, according to a previous Nuance study.  

In the majority of cases, the fraud threat is compounded by poor password hygiene. The study discovered that, when selecting a password, under a quarter (24%) of respondents try to have different one for every website or brand they interact with and less than one in five (19%) follow the ‘password strength’ indicators.   

Instead, 22% of those surveyed have two or three different options that they bounce between. To make matters worse, around one in ten (7%) choose the same passwords for nearly everything, irrespective of strength and uniqueness.  

According to the findings, traditional PINs and passwords are still creating challenges for UK consumers. Each month, over one third (34%) forget and have to request to reset them, whilst one in five (20%) receive notifications that they have been compromised. In light of this, it’s unsurprising that over one third (34%) of respondents reported their trust in PINs and passwords had decreased over the last 12 months. 

PINs and passwords are an archaic tool, no longer fit for their original purpose, as this research makes clear,” said Simon Marchand, Chief Fraud Prevention Officer for Security and Biometrics at Nuance. “Every day, passwords are being sold on the dark web and exploited for fraudulent activity. The fraud committed with them – not to mention the challenge and frustrations associated with simply remembering them – is costing unfortunate businesses and individuals vast sums of money, especially in the wake of the pandemic. With fraud on the rise, brands have a responsibility to develop a more comprehensive approach to authentication.” 

As PINs and passwords continue to fail, organisations and individuals alike are increasingly looking to different, more effective and convenient ways to prevent fraud. 

According to the poll, consumer comfort over the use of biometrics is growing in the UK, with almost half (45%) saying they feel more comfortable using the technology to authenticate themselves than before the pandemic. In fact, over a third (34%) of UK consumers now trust a form of biometrics (either voice, facial, fingerprint, behavioural or a combination of these) most as a means of authentication.

Biometrics authenticate a person’s identity based on characteristics inherent to them, such as the sound of their voice, the way they speak, type, and swipe on their device, and even their word choice and sentence structure.  

As we transition into a post-pandemic world of remote working, shopping and socialising, it has never been more important for businesses to ensure that consumers are provided with a more sophisticated and secure experience,” added Marchand. “Now is the time to confine PINs and passwords to the history books. Stronger approaches to authentication, such as biometrics, have not only been proven to help reduce the cost of fraud, but will also introduce a more streamlined, seamless customer experience to deliver faster and more efficient services.” 

Digital brand interaction on the rise due to pandemic

Over half (55%) of UK adults will interact with brands more through digital and virtual channels than face-to-face post-pandemic, according to a global study from Nuance.

The study, which polled 10,000 adults across the US, UK, Australia, Germany, France, Belgium, the Netherlands, Sweden, Italy, Spain and Mexico, also found that over half (51%) of UK respondents would rather use apps or a company’s website than go into a physical branch or store to complete tasks such as shopping and banking.

When it comes to communicating with brands, over one in four (26%) UK adults said they still preferred in-person visits or phone (13%), 42% choose digital channels including email, live-chat and chat-bots. Convenience (51%) and speed (36%) were the most common drivers for choosing a preferred method of communication, with speaking to a ‘real’ human (26%) trailing.

Nuance says the findings illustrate that consumers are becoming increasingly comfortable using technology to make purchases and access services, while still expecting brands to deliver a human touch when required.

In addition to being more comfortable using tech like chatbots, virtual assistants, and mobile applications to interact with brands, adults in the UK have also increased their trust in tech that helps them access their personal information and accounts online.

According to the study, almost half (45%) are now more comfortable using biometrics to authenticate themselves when accessing their accounts than they were before the pandemic, with 38% feeling more comfortable using their smartphone to access their accounts as well. These figures are reflected in the global findings with a similar number (49%) more comfortable using biometrics and 47% more comfortable using their smartphone to access accounts.

A third (34%) of UK respondents now place the most trust in a form of biometrics (either voice, facial, fingerprint, behavioural, or combinations of each) as a means of authentication. This is an important step in the right direction, says Nuance, as fraudsters have been increasingly targeting individuals during the pandemic, exploiting archaic authentication methods like PINs and passwords that can be made accessible via the dark web to gain access to consumer accounts and funds. While this is progress, the UK still lags behind the US in terms of trust in biometrics, with nearly half (45%) of adults backing the technology.

This growing trust in technology across age groups is likely a reflection of the positive experiences customers have received online. When asked about how they would rate the customer services they’ve accessed online over the past 12 months – services that might have previously been accessed in-person, like banking or shopping – 58% of UK shoppers said good or excellent. This is less than the global responses, in which two thirds (66%) rated their customer services at the same level.

“With convenience, speed, and ultimately getting the job done prevailing as clear priorities for buyers, organisations such as retailers, banks, and utilities companies must develop strategies for delivering consistently efficient and effective digital experiences,” said Seb Reeve, Intelligent Engagement Market Development at Nuance. “From slick and secure authentication processes to intuitive AI powered intelligent assistants, technology must be able to manage the personalised needs of customers while seamlessly bridging to human intervention when required at the right moment.”

“Customers expect immediate and effective conversations with the brands they engage with – whether those conversations are happening on the phone or via a chatbot on a company’s website. Empowering these engagements requires an integrated approach where an organisation not only can understand the customer’s intent but also authenticate that customer and start personalising their experience across every single channel – from in-person, to phone, to web, to mobile. With the pandemic creating an increasing comfort, trust, and preference among consumers to use technology when engaging with brands, it will be critical that organisations prioritise delivering superior digital experiences if they want to retain customer loyalty and continue to scale.”