Over half of consumers are more concerned about fraud now compared to a year ago, according to a study by Experian.
Experian’s 2023 US Identity and Fraud Report found consumers and businesses were worried about fraud and online security, with nearly two-thirds of people surveyed reporting they’re very or somewhat concerned with online security.
The report is based on survey responses from more than 2,000 US consumers, as well as a separate survey of over 200 businesses in North America, ranging in size from $10 million to above $1 billion in revenue.
It comes as banks are preparing to up their spending on work to combat different types of fraud, according to separate research.
The survey found consumers were most concerned about identity theft (64%), followed by stolen credit card information (61%) and online privacy (60%).
Among businesses, nearly 70% reported that fraud losses have increased in recent years and the survey found authorized push payment fraud was the leading fraud event type, experienced by 40% of businesses.
Most businesses said they would increase their fraud budgets by 8% to 19%, likely responding to the high expectations of consumers, with 85% saying they expected businesses to respond to fraud concerns.
Part of those increased budgets could go towards research and the application of machine learning to fraud identification strategies. The study found nearly 60% of businesses were already emphasizing or are looking to build machine learning capabilities.
The rise of AI in fighting financial crime was supported by businesses, with 90% of the businesses currently using machine learning models reporting a high level of confidence in their effectiveness at fraud detection and prevention, and 87% reported high levels of confidence at customer authentication.
Kathleen Peters, chief innovation officer for Experian’s decision analytics business in North America, said: “With the right identity and fraud prevention solutions in place, businesses can take a multilayered approach to verify identities, properly treat fraud and provide a frictionless customer experience that builds trust.”