Memo to bankers: Don’t let fraudsters mess with a millennial’s bank account if you want to keep their business.
All it takes is one fraud incident, whether it’s identity theft, lost or stolen information, ATM skimming or a compromised account to send those millennials packing, according to a recent survey by FICO, the credit-scoring company.
The study showed that 29 percent of millennials will close all accounts with that bank after an incident, compared with about 22 percent of all U.S. consumers. FICO surveyed approximately 1,000 consumers in October and November 2015.
“The tolerance level is so low,” said Alex Matjanec, CEO of bank comparison site MyBankTracker.
Millennials were also more likely to slam the bank on social media. One in four said they would make a negative comment on Facebook, Instagram or Twitter if the fraud incident wasn’t handled well and another 21 percent would actively discourage their friends and families from using that bank.
“Consumers are looking for greater protection from fraud and sophisticated identity theft,” said TJ Horan, vice president of product management at FICO. “Combined with the sharp increase in ATM compromises, it’s clear that fraud prevention and communication are more vital than ever.”
The issue of trust is important to all banking customers, and it can convey different meanings to different people. In addition to conveying trust in a traditional sense, including the many layers of protection offered by banks and credit unions to secure cash and protect customers’ and members’ savings, trust can expand to such areas as protection of personal and account information and access. This level of trust is more difficult to define and plan for, as it’s often an implied belief that the institution is doing all it can to protect customer information. For many, including Millennials and other tech-savvy consumers, this trust is vital. If this trust is broken, then the relationship is often over. This is why it is so important for FIs to do all they can to follow industry best practices in such areas as IT, device, and network security, and communicate recommended actions that customers can take to protect their own account information.
Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group
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