New data reveals the rising prevalence of fraud and security risks, both online and in-store, significantly impacting consumer trust and urging retailers to strengthen security measures across the board.
According to a survey conducted by digital transformation consultancy Daemon, cyber security remains a growing concern for UK shoppers. Over the past six months, 36% of Brits reported falling victim to phishing scams. Other issues included non-delivery of purchased items (33%), credit card fraud (30%), counterfeit goods (28%), and identity theft (17%).
The findings highlight generational differences in vulnerability to fraud. Identity theft has affected 25% of Gen Z respondents, compared to 9% of Millennials and Baby Boomers. Meanwhile, Baby Boomers reported the highest exposure to phishing scams at 57%, compared to 36% of Millennials and 31% of Gen Z.
The impact of online fraud is evident in eroding consumer trust. According to the research, 42% of those affected expressed diminished trust in the online retailer involved. When asked what would help restore confidence, 45% of consumers cited swift and accessible customer support for addressing security concerns. Displaying security certifications and badges (30%) and implementing AI fraud detection (24%) were also seen as trust-building measures.
Marc Peiser, cybersecurity expert at Daemon, said, “The prevalence of scams and fraud that consumers have reported experiencing in such a short time is alarming. As customer trust becomes inseparable from their shopping experience, it’s clear that retailers must bolster their cyber security efforts to safeguard their customers and maintain strong relationships.”
Payment methods under scrutiny
The report also sheds light on consumer perceptions of payment security. Over half (57%) of respondents considered cash the most secure payment method, followed by credit and debit cards (44%) and PayPal (38%).
However, opinions vary by generation. Digital wallets are trusted by 40% of Gen Z but only 12% of Baby Boomers. Similarly, 67% of Baby Boomers view cash as very secure, compared to 50% of Gen Z. Buy Now Pay Later (BNPL) services are trusted by 27% of Gen Z, while only 15% of Millennials and 9% of Baby Boomers feel the same.
Peiser added, “As retailers introduce more payment options, it’s clear that consumer preferences must be factored in. There’s also a need for greater education around the security of newer payment methods to boost adoption, especially as cash usage continues to decline.”
In-store threats on the rise
Security concerns are not limited to online shopping. In-store threats are becoming more pronounced, with 38% of respondents calling for an increased presence of security guards, a figure that rises to 43% among Baby Boomers. Other measures, such as additional CCTV cameras (35%), AI for threat detection (14%), and smart vending machines (20% among Gen Z), were also cited. However, 19% of respondents stated that no additional measures would make them feel safer shopping in-store.
A concerning 25% of consumers believe shoplifters are unlikely to be caught and prosecuted. Peiser concluded, “Neglecting to implement robust security measures is damaging the in-store shopping experience. If consumers feel unsafe, retailers risk losing a loyal customer base. Retailers need a holistic approach to security that integrates both in-store and online protections, or they may face lasting changes to consumer behaviour.”
Keep up with all the latest FinTech news here.
Copyright © 2024 FinTech Global
