A new survey by global analytics software company FICO has highlighted the significant risks facing Indonesian banks as scams increase and consumer expectations evolve.

According to FICO’s 2024 Scams Impact Survey: Indonesia, one in three consumers hold banks – whether the sender’s or receiver’s – responsible for scam-related losses, despite many accepting that they may never be reimbursed.

Furthermore, 69% of consumers would lodge a formal complaint if they were dissatisfied with their bank’s response to a scam, 12% would consider switching banks, and 8% would escalate the issue to a regulator.

These findings underscore the growing pressure on banks to adopt a more proactive approach to scam prevention or risk reputational damage and customer loss.

“Fraud prevention is no longer just a compliance requirement – it’s a key factor in customer trust and loyalty,”

said Dattu Kompella, Managing Director for Asia at FICO.

“Consumers expect banks to be at the forefront of the fight against scams, and institutions that fail to meet these expectations will struggle to remain competitive.”

Consumers Expect Protection, Not Refunds

While refund policies have become an increasing focus for regulators worldwide, Indonesian consumers appear to have relatively low expectations regarding refunds.

According to the survey, nearly 6 in 10 (59%) believe banks should “never” or “only rarely” refund scam victims, while just 3 in 10 (27%) think banks should provide refunds all or most of the time – significantly lower than the global average.

“This data turns the refund debate on its head,”

added Kompella.

“Indonesian consumers are pragmatic – they don’t expect refunds, but they do expect their banks to act as a shield. That means leveraging technology, data, and real-time decision-making to prevent scams before money leaves the account.”

Consumers Demand Stronger Scam Prevention Measures

Scam exposure continues to rise across Indonesia.

In 2024, 66% of consumers reported receiving suspicious messages, an increase of 2 percentage points from 2023.

Additionally, 57% said a friend or family member had been scammed, an 8-percentage point rise from the previous year.

While 55% of Indonesians say they would take personal responsibility if tricked by a scam, many still expect their banks to share the responsibility.

More than one-third of consumers blame either the sending bank (15%) or the receiving bank (19%), indicating a shift in expectations towards shared accountability.

“Indonesian consumers want their banks to be active partners in the fight against fraud,”

Kompella said.

“This represents a crucial opportunity for banks to strengthen their defences and proactively protect consumers. By doing so, banks not only safeguard their customers’ finances but also reinforce their reputation as trusted protectors.”

Proactive Fraud Prevention Drives Positive Sentiment

The survey also revealed that proactive scam prevention fosters consumer trust. 69% of Indonesian consumers stated they would have a positive view of their bank if it blocked a payment linked to a suspected scam, even if the action resulted in a temporary delay.

This finding underscores the value of real-time decision-making, automated alerts, and customer education.

“Effectively combating scams requires more than just good intentions – it demands intelligent systems,”

concluded Kompella.

“Technologies like AI-driven analytics, real-time decision-making, and contextual engagement enable banks to act swiftly and precisely, delivering targeted warnings or triggering step-up authentication, or even suspending a transaction before it’s completed.”

FICO’s survey was conducted in 2024 by an independent research company.

It surveyed 1,001 Indonesian adults, along with approximately 11,000 consumers across 14 countries, to examine their experiences regarding real-time payments (RTP) usage, scams, and their banks’ scam prevention capabilities.

Featured image credit: edited from freepik