FICO Survey: Half of Indonesians Believe It Is OK to Exaggerate Income on Loan Applications and Insurance Claims
May 29 2023 - 10:00PM
Business Wire
Stretched finances due to higher cost-of-living
push many to consider falsifying information
FICO (NYSE: FICO), a leading global provider of analytics
software, today announced further findings from its consumer fraud
survey exploring attitudes and preferences towards fraud checks.
The study revealed that almost half of Indonesians are willing to
commit fraud to obtain a loan or file an insurance claim. However,
it also highlighted that financial institutions can generate
increased revenue and drive sales through a successful fraud
protection function.
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FICO Survey: Half of Indonesians Believe
It Is OK to Exaggerate Income on Loan Applications and Insurance
Claims (Graphic: FICO)
More information:
https://www.fico.com/en/latest-thinking/ebook/consumer-survey-2022-fraud-identity-and-digital-banking-indonesia
Giving false information is considered acceptable by
many
When asked about their attitudes to giving false information for
financial or material gain - known in banking as first-party fraud
- half of Indonesians supported these behaviors. Around 25 percent
of respondents said there are circumstances when it’s OK to
exaggerate income on a loan or mortgage application, while 15
percent thought it was normal to do so. The survey revealed similar
proportions of consumers would exaggerate an insurance claim or add
items to a claim.
“Our findings underline the importance of robust fraud
prevention strategies in safeguarding customers’ interests and
strengthening the bottom line,” said C.K. Leo, FICO’s lead for
fraud, security and financial crime in Asia Pacific. “With
almost half of Indonesians show a willingness to commit fraud for
monetary reasons, it should alert lenders to bolster their fraud
defenses.”
This sentiment is consistent with Southeast Asian neighbors
Thailand and The Philippines (50 percent), and interestingly even
more pronounced in Malaysia where over 60 percent of the
respondents said such behaviors are normal.
The results indicate that banks in Indonesia may be making
inaccurate risk assessments as a result of false information on
applications, potentially leading to financial losses from inflated
insurance claims. Additionally, customers may not be aware that
providing incorrect information on applications or claims is
illegal.
“The rising costs of living and uncertain financial climate have
driven some Indonesians to take drastic measures to obtain credit
and other means to make ends meet,” said Leo.
“However, misrepresenting information constitutes fraud. By
enhancing their ability to identify overstated or false
information, financial institutions can proactively protect
themselves against losses caused by customers' defaulting on
repayments. In doing so, they can also support customers in
avoiding regrettable outcomes.”
Fully leveraging data and analytics to drive fraud
protection
Financial institutions frequently possess the evidence required
to distinguish between fraudulent and legitimate applications.
However, fraud teams are frequently unable to utilize this data
because it is siloed. These inefficiencies result in inadequate
fraud protection and compromise the customer experience. Banks
prompt customers with arduous and time-consuming identity checks,
resulting in increased costs and duplications that cause
frustration for customers.
“In a highly competitive banking industry, a flawed fraud
strategy can prove to be expensive,” said Leo. “A fraud
team’s success hinges on balancing between strong protection and
fulfilling the genuine needs of customers. With a holistic approach
to an applicant’s data, fraud teams will be able to better separate
fraudulent applications from legitimate ones. The application of
analytics and machine learning models will further bolster a bank’s
defenses while generating higher levels of customer
satisfaction.”
Conducted in late 2022, the report surveyed 1,000
people each in 14 countries: Indonesia, the USA, Canada,
Brazil, Mexico, Colombia, Peru, Malaysia, Thailand, The
Philippines, South Africa, Germany, the UK and Sweden.
About FICO
FICO (NYSE: FICO) powers decisions that help people and
businesses around the world prosper. Founded in 1956, the company
is a pioneer in the use of predictive analytics, AI and data
science to improve operational decisions. FICO holds more than 200
US and foreign patents on technologies that increase profitability,
customer satisfaction and growth for businesses in financial
services, manufacturing, telecommunications, health care, retail
and many other industries. Using FICO solutions, businesses in
nearly 120 countries do everything from protecting 2.6 billion
payment cards from fraud, to improving financial inclusion, to
increasing supply chain resiliency. The FICO® Score, used by 90% of
top US lenders, is the standard measure of consumer credit risk in
the US and other countries, improving risk management, credit
access and transparency.
Learn more at http://www.fico.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20230529005002/en/
Neil Mirano RICE for FICO +65 3157 5680
neil.mirano@ricecomms.com
Saxon Shirley FICO +65 9171 0965 saxonshirley@fico.com
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