As stories of banking data breaches continue to hit the headlines, consumers are increasingly sceptical about the security of their online bank accounts. Now, new research by IDEX Biometrics ASA reveals that those in Generation Z (born after 1995) are particularly concerned by banking fraud.
According to our report, nearly eight-in-ten (79%) of those in Generation Z think banks should do more to protect their customers from fraud. The youngest wave of consumers expect this level of security even more strongly, with 95% of 16-17-year olds agreeing banks should step up fraud protection for their customers.
For those in Generation Z, banking in the digital age isn’t just a convenience, but also a source of risk. In fact, more than half (52%) of our respondents are worried about someone stealing their identity. Worryingly, young shoppers also aren’t confident in the ability of banks to deal with cases of fraud. Only half (54%) of respondents are confident that their bank would refund them any losses if someone fraudulently accessed their bank account and stole any amount of money.
A lack of trust in current banking security is supported by the experience of Michael, a 19-year-old from London, interviewed at a focus group into payment security held by IDEX Biometrics ASA: ‘I had £50 disappear from my account once, without me knowing,” said Michael. “So I feel using chip and PIN cards are sketchy, because people can make a clone of your card,” he continued.
To reduce their security concerns, Generation Z wants to see banks adopting new technology that will offer better protection against the risk of card and online fraud. Notably, three-in-five (62%) think banks should offer biometric payment cards to help reduce levels of payment fraud.
In fact, more than three-in-five (62%) Generation Z consumers think all banks should offer biometric payment cards to help reduce fraud, while nearly half (46%) would choose a bank that offered biometric payment cards over one that didn’t.
The thoughts of Periklis, a 24-year-old from London at the focus group reflect this view on biometric payment cards: “Biometric fingerprint cards look like they offer added protection, but it’s not complicated to use,” commented Periklis. “I think it’s a nice security feature and convenient for high purchases above the £30 contactless limit.”
Maybe unexpectedly, young shoppers are willing to pay for additional convenient payment security. More than two-in-five of those in Generation Z (43%) would expect to pay for a biometric payment card, while a third (33%) would be willing to pay between £3-£5 per month for a debit or credit card with fingerprint protection rather than a standard one.
“There is a clear emphasis on banking and payment security among Generation Z. Younger shoppers already understand the importance of protecting their bank accounts and cards, and they’re excited by a future that uses biometric technology to achieve this,” comments David Orme, SVP, IDEX Biometrics ASA.
“Generation Z are familiar with fingerprint authentication in smartphones and payment apps and understand the level of security they provide. Because of this, adopting biometric fingerprint payment cards is a small but crucial step to protect the next wave of consumers from payment fraud, without inconveniencing their lives,” added Orme.