Fraud is Affecting a Large Section of Indian Consumers: Experian Report

MUMBAI:
A survey by Experian has found that almost one-third of Indian consumers have been victims of online fraud. More than half of the Indian consumers surveyed reported concern about fraud and identity theft and see a significant rise with today’s growing fraud risk due to digitalisation.

In the six APAC markets surveyed (India, Australia, China, Indonesia, Malaysia, and Singapore) in Experian’s Global Identity & Fraud Report, consumers in India and China appeared to be especially vulnerable, with 29% of consumers in each market having been the victim of online fraud. This is slightly higher than global figures, where nearly 1 in 4 (23%) consumers have also experienced similar incidents.

The report also found that 7% of Indian consumers surveyed reported that at least one of the fraud incidents resulted in substantial monetary or reputational damage. This was the highest among the APAC regions. Meanwhile, 12% of Indian respondents’ friends and family also suffered substantial monetary losses due to fraud incidents.

Consumers are vulnerable to fraud on social media sites and apps
The report found that Indian consumers are most vulnerable to fraud on social media sites and apps (38%) followed by payment system providers (30%) and online gaming platforms (30%) – with consumers on these platforms also ranking the most susceptible to fraud throughout APAC. Indian consumers are highly vulnerable to suffering from online fraud on e-commerce marketplaces (29%), on online branded retailer sites (25%), and on streaming service platforms (25%)., India has the highest rate of fraud in these categories out of the six APAC markets surveyed.

Consumers rely on businesses to keep them protected, but whose responsibility, is it?
Four in five Indian consumers surveyed (80%) expect businesses to take the necessary steps to protect them online, reflecting global trends where nearly three out of four consumers expect businesses to do so. While consumers are starting to view online security as a legitimate trade-off for businesses collecting their personal data, they expect businesses to protect them from online threats that are too complex for consumers to handle. Indian consumers demand the most from businesses to protect them online, with 95% of consumers believing that businesses should support and take action to address online security issues.

Businesses globally are acknowledging the growing risk of fraud, with 67% of Indian business respondents reporting that fraud was a high concern. More than half of survey respondents from retail banking, credit card networks, and consumer lending specialists globally categorised their fraud concerns as high.

While businesses are taking action to protect against fraud, there remains a gap between consumer expectations and the digital experience businesses can offer. Only 38% of Indian consumers who were interviewed feel that businesses have met their expectations when it comes to a digital experience. Only 40% of Indian consumers surveyed felt safe transacting on their retail banking platforms, 35% felt safe on insurance companies’ platforms, and 36% felt safe on payment system providers’ platforms.

Growing consumer ease and trust in advanced forms of digital recognition
A seamless digital experience continues to be a priority for Indian consumers, who trust businesses more if they can recognise them on a repeated basis without additional layers of verification. In fact, 91% of Indian consumers surveyed were ‘extremely to somewhat trusting of businesses’ that can provide a seamless customer journey by repeatedly recognising their online identity.

The report also showed an increased dependency on advanced technology such as artificial intelligence (AI) – two thirds (69%) of Indian consumers surveyed have interacted with AI-powered chatbots or virtual assistants in the past six months. Overall, APAC consumers are becoming more comfortable with businesses leveraging AI, with 64% of India respondents – the highest in APAC – being much more comfortable and somewhat more likely to trust AI than humans.

Neeraj Dhawan, Country Manager, Experian India, says “There has been an exponential rise in digital payments in India, driven by the increase adoption of technology, making consumers and businesses susceptible to new and innovative types of online fraud. With the boom in the digital payments, consumers and businesses need to remain vigilant and aware of emerging fraud trends and understand the risks involved in online transactions. At Experian, we endeavour to protect and support businesses by providing innovative fraud detection solutions such as Hunter, which is used by banks and financial institutions worldwide, and by educating consumers to identify fraudsters at an early stage.”

In the 2022 Global Identity and Fraud Report, Experian explored the growing expectation for businesses to recognise and protect consumers online, and the challenges businesses face in meeting this expectation. The survey underpinning these insights encompassed 1,849 business respondents and 6,062 consumers from 20 countries including India.

The Experian 2022 Global Identity and Fraud Report can be downloaded https://www.experiansolutions.in/experians-2022-global-identity-and-fraud-report