Navigating fraud in the mobile world

Gen-D: Navigating Fraud and

Suspicious Charges

Who makes up the Digital Generation

and why do they matter?
The Digital Generation (Gen-D) is made up of technologically
savvy consumers comfortable using all types of devices and
apps. Theyre open to trying nontraditional products that are
fueled by technology.

FPO
Diagram

While Millennials make up a large portion of this audience,

Gen-D is more of a mindset. Theyre having some very
expected and unexpected impacts on our economy and
its a group that will increasingly dominate consumer
spending for decades.
FICO recently completed an extensive consumer research
study that looks at Gen-D. This report covers data related
specifically to Gen-D fraud insights and opportunities.

2016 Fair Isaac Corporation. All rights reserved. 2

Gen-D: Navigating Fraud and

Suspicious Charges

What do Millennials expect from banks?

Insight: Millennials know they have options when it comes

Opportunity: Millennials expect their bank to

to banking. Theyre not shy about demanding a relationship

know them, understand their preferences and, most

that works on their terms. Our recent consumer research

importantly, offer a highly relevant mobile app that allows

study shows that Millennials prefer to work with their bank

them to engage their bank on their terms. If the mobile app

through a phone on-demand via a mobile app.

experience meets or exceeds expectations, this audience

This is especially true for all types of notifications including

will become advocates for their banks services.

fraud alerts.

Mobile is
king

Its all about

the app

Fraud still
a switching
factor

Millennials expect to
bank when and where
they prefer.

Millennials will contact

their bank on their terms.

Fraud impacts
customer loyalty.

2016 Fair Isaac Corporation. All rights reserved. 3

Gen-D: Navigating Fraud and

Suspicious Charges

How can your banks mobile app

help prevent fraud?
Insight: Millennials relationship with their bank starts in their
pocket. If mobile is king, the app is the equally important queen.
25% of Millennials consumers connect with their bank daily via
mobile applications.
An intuitive app that is highly functional, with a relevant and
progressive UI, is a key motivator for Millennials.

Opportunity: Banks that leverage mobile app services to

empower digitally savvy consumers gain an additional layer
of defense against fraud. Consumer Fraud Controls from FICO
enable customers to set limits, stop card expenditures, and select

3 times

Millennials are
more
likely to prefer mobile app notifications
for suspicious charges.

the merchants, countries and services for which the card can or
cant be used.

2016 Fair Isaac Corporation. All rights reserved. 4

Gen-D: Navigating Fraud and

Suspicious Charges

What actions do Millennials take when affected by fraud?

Insight: Traditional banking customers share their

Opportunity: The way in which banks engage with

experiences both positive and negative via word of mouth.

customers to inquire about fraud or validate transactions

Millennials share their experiences via social media and digital

greatly influences the customers experience.

channels, which means theyre using a digital megaphone that

FICO Fraud Resolution Manager enables banks to reach

greatly amplifies their opinions and perhaps influences the

a consumer in fewer than 30 seconds after a suspicious

opinions of others.

transaction event.

When Millennials are positive, they will recommend a bank,

It enables banks to engage customers via their channel

open additional accounts and essentially assist in promoting

of choice, which for Millennials is typically text. This helps to

the bank. When negative, Millennials will close accounts and

increase customer trust and loyalty in ways that can

chronicle their experience online.

drive account usage and spending.

2016 Fair Isaac Corporation. All rights reserved. 5

2x more likely to switch.*

Gen-D: Navigating Fraud and
Suspicious Charges

What makes fraud a top priority

for banks and Millennials?
Insight: Millennials are far more likely to close accounts and switch
banks when they have a negative fraud interaction with their bank.

*2x mobile switching vs. overall US population.

Fraud management impacts customer loyalty.

More than one in five who

experienced fraud closed the account
associated
the incident.
Done well it iswith
a positive,
done badly
Millennial customers will leave.

FICO research shows that after a negative fraud event, nearly 1 in 3

Millennial customers close all accounts. When fraud is handled well,
Millennials are 2X more likely to recommend the bank.

Opportunity: Harnessing big data, behavioral analytics and

automated two-way communications is intrinsic to any banks fraud
strategy. Behavior Sorted Lists, a proprietary analytic from FICO,
uses analytic intelligence to dramatically reduce false positives so

2X more likely

When fraud is handled well, Millennials are

to recommend the bank to friends, family members or colleagues.

Nearly one in six who experienced

fraud closed all accounts.

customers arent declined when making legitimate purchases and

continuing to build loyalty with the bank.

One in three

Millennials who
Nearly
experienced fraud closed all accounts.

2016 Fair Isaac Corporation. All rights reserved. 6

Gen-D: Navigating Fraud and

Suspicious Charges

How can banks enable Millennials with fraud controls?

Insight: Data breaches and card theft are consumers top
safety concerns. Consumers want the power to proactively protect

Card Control
Mobile App Features

themselves against fraud and other account misuse.

Opportunity: Banks can empower consumers to do more

by integrating the following features into their mobile apps:
Proactive monitoring of account and card activity
Controlling when, where and how a card is being used

Interested

Turn on or off the ability to use

my credit/debit card at different
types of merchants

54%

Set limits on the amount of

purchase that can be made on
my credit/debit card

51%

Set controls for where my

credit/debit card can be used

50%

Set controls on the types of

purchases for which my
credit/debit card can be used

50%

Instantly pausing card function in the event of suspected fraud

or loss

With smartphone adoption and use continuing at a breakneck

pace The Economist estimates that by 2020, 80% of the
worlds adults will own a smartphone consumers now look to
these ubiquitous devices to help improve their financial lives.

Source: FICO Banking Engagement Survey, 2016

2016 Fair Isaac Corporation. All rights reserved. 7

Gen-D: Navigating Fraud and

Suspicious Charges

Get the tools and support you need

to serve the Digital Generation
When it comes to connecting with the Digital Generation,
FICO provides unrivaled analytics and fraud management
solutions that help you create smarter decisions that shape
the future of finance.
Learn more: www.fico.com/enterprisefraud

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