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HONG KONG, 16 September 2020 — Recent research by data enrichment fintech gini shows 66.7% of respondents feel their bank should be doing more to improve online services during the pandemic, with one of the major pain points being the lack of clarity in the way information is displayed on transaction histories.
The survey showed that 81.7% of respondents have seen transactions they don’t recognise on their statements, and the majority used the words, “worried”, “annoyed” and “frustrated” to describe how this problem makes them feel.
The pandemic has exacerbated consumer anxiety around unrecognised transactions
While the problem of unrecognised transactions is not a new one, the compounded effect of an unprecedented surge in card-not-present transactions during the pandemic and the resulting increased exposure for digital payments fraud, plus new levels of economic uncertainty, has made consumers more careful about tracking their spending in general.
In gini’s survey, 23.3% of respondents said the increase in online payments this year has made them more worried about fraud, while 53% said they were “always worried about fraud” even before the pandemic.
The true cost of unrecognised transactions
In addition to the emotional toll on consumers, unrecognised transactions present a practical problem, too. Most respondents (71.7%) have called or visited a bank branch to get more information on a transaction this year, and the reported time taken to resolve the issue varied from “10 minutes” to “3 months” to “It still hasn’t been resolved.”
For those who raised a transaction query with their bank, 19% said the bank was unable to help, while 25% said they got their money back after the bank launched a chargeback investigation.
The truth is, the problem of unrecognised transactions is costing financial institutions millions of dollars each in customer support and chargeback and fraud investigations every year. Globally, chargebacks are expected to cost financial institutions US$16.4 billion this year alone.
“It’s interesting to note that the problem of unrecognised transactions is something most banks just put up with,” said Ray Wyand, CEO of gini. “Because they’re not aware it’s actually preventable.”
Supporting customers with better online banking services
While suggestions for improvement included, “the ability to change address online” and “the ability to reset passwords online”, 100% of respondents said they “want the banking app to show the actual shop name for each transaction.”
“The reason this is so difficult to do,” Ray continued, “is that most merchants are registered by their holding company name, which often bears no resemblance to the trading name. So ‘The Dairy Farm Company Ltd’ will show up on your transaction history, instead of ‘Wellcome’, for example.”
Not only does this cause confusion for consumers trying to track their spending and make better financial decisions, it also threatens customer retention. The survey showed that 60% of respondents would be likely or very likely to switch to a bank that provided actual merchant names on transactions.
“Banks that have invested in a better online customer experience by showing the actual merchant name for each transaction have seen transaction queries reduce by up to 60% and chargeback costs reduce by up to 40% in other countries,” Ray explained. “There’s no reason it can’t be the same in Hong Kong.”
Click here to calculate how much chargebacks are costing your institution today.
gini’s enrichment software matches each raw transaction string to an accurate merchant trading name, category and location, with additional contextual tags, helping banks solve the problem of unrecognised transactions at the source. Founded in 2017, gini is known for its market-leading transaction data enrichment software, and is currently the only data enrichment solution deployable instantly to a client’s private cloud server via AWS.