Digital Banking Sans Security Brings More Tear Than Smiles For Consumers In India

FIS Study Reports 18% Young Consumers Were Frauded During Last Year

Digital banking gained ground in India steadily after demonetization.

Almost 58 per cent of all contacts with Indian banks by consumers are now digital. However, in less than two years, young Indians are complaining of being defrauded by one or the other digi-banking platform.

A recent research found out that one out of four young consumers aged between 27-37 years have been defrauded by some digital banking platform. That is a huge 18 percent of the total people surveyed by payments company FIS. It implies the importance of putting right security mechanisms for digi-transactions in place.

An interesting fact brought up by the study is that Indians aged above 53 years are using digital banks more than the youngsters. People of this age group use their laptops and smartphones more for various transactions.

However, the disturbing part of this study is that most banks have failed to ensure consumer security. While the FIS report found out cases of fraud with only 6 per cent consumers in Germany and 8 per cent in the UK, India compares quite poorly. This also points to a lack of awareness of security related issues among Indian consumers – young or otherwise.

While consumers in the US are very likely to distance themselves from a banking app that has reported security related vulnerabilities, Indian consumers tend to be quite indifferent to this issue. The study finds that Indian consumers are more wary of not getting due attention and recognition from their bankers.

Close to 40 per cent of customers told the surveyors that they were not entirely satisfied with their bankers’ lukewarm recognition which could lead to an erosion of customer base and loyalty for banks over time. So, banks have to mind the fact that switching banks is much easier now than it used to be some years back.

The report, however, suggests that Indian consumers are getting financially smarter with 60 per cent of respondents saying that they had at least one financial advisor and at least another 5 per cent saying that they had more than one. Financial advisors are being used by all age groups, even as it was a bit lower on the younger age side, with only 44 per cent of people in the 18-26-year age bracket reporting to be employing one.

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