Online Banking Fraud Risk Awareness

Introduction of the Study


The rationale of this research is to investigate how online-banking private customers are aware of the risk associated with the services. The pool of online banking customers interacts with their banks using electronic devices such as computers and mobile devices without visiting a bank branch. The term personal customers are used on the main heading to indicate individual customers or private customers and not business customers. It targets personal customers, who interact with banks to access their savings, withdraw money and make payments among other services without human contacts or the presence of bank staff.

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The impact of technology has shaped how people live, access information and solve problems in their daily lives. Technology avails modern and advanced portables devices such as computers, tablets and mobile phones to perform certain complex tasks easily. On the other hand, the availability of the internet facilitates instant connections among people and business organizations. Technology empowers many businesses to move their operations from traditional methods into both physical and online shop and store catalogs. Through their physical and online platforms, businesses offer a similar menu to customers.

Banks, like any other business, respond to positive changes and adapt to the new environment. In the 21st century, online banking has been increasing in popularity. It is due to the availability of cheap infrastructures that allow banks to serve their customers wherever they are around the world. In the current context, many banks in the United Kingdom serve their customers in both their local branches and online catalog menu.

The growing popularity of online banking services came after both personal and business customers had started to embrace banking services offered through their electronic interfaces. The power of technology and internet availability across the world enhances greater connections between customers and bank institutions globally. For instance, international banks use online platforms to provide banking services to customers from Africa, Asia, Europe and America and other parts of the world.

Through online platforms, customers can access banking services remotely and 24/7 throughout the year. The technological advancement as opposed to the traditional local bank branches that could not meet the customers’ expectations to such levels. Because of the growing popularity of online banking services, online security concerns toward banks and their customers have been raised. However, this research focused on personal bank customers who are willing to use online banking services.

Online banking is a new era that bank institutions use to interact with customers and provide services to them. They are still learning how to improve those online banking services and build trust towards their customers. Online services have continued to attract businesses and their customers. The availability of resources and quick adoption of technology to conduct online business has been the key to the success of the online business.

Because of the attractiveness and comfort of online banking services, there are serious threats currently posed to online banking. Fraud has been the main threat that affects customers. Customers are still in the learning process. They are still learning how they can interact with banks online. While learning to use online services to interact with their chosen bank institutions, customers have become a weak target of cybercriminals. It is because a significant number of customers cannot understand the online environment.

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Study Hypotheses

The study is based on the null and experimental hypotheses. The main objective of the researcher is to disapprove of the null hypothesis, which tends to reject the experimental outcomes of the study. The following are the hypotheses:

Null Hypothesis

An insignificant difference exists between personal customers who are aware and those who are unaware of online banking fraud in the United Kingdom.

Experimental Hypothesis

Even though the majority of customers are aware of the threats posed by online banking fraud, a significant number do not understand how to deal with fraud.

Research Aim

This research aims to understand online banking personal customers and their risk awareness of fraud using online banking services through their electronic devices such as computers, tablet devices, mobile phones.

Research Objectives

  • To understand the nature of online banking and their customers.
  • To understand types of online banking fraud which exist at the current time.
  • To understand customers awareness of online banking fraud.
  • To evaluate the benefit of online customers’ awareness of the fraud risks they are exposed to when doing banking transactions online.

Research Questions

  • What are online banking and its future in the banking industry?
  • How do personal customers adopt online banking?
  • Our online customers aware of online fraud risk by using online banking?
  • What support do the financial institutions give online customers to increase their online fraud risk awareness?

Literature Review

Fraud is an intentional act committed to secure an unfair or unlawful gain (KPMG 2006). Online fraud refers to the crime committed by a person or group of people toward an organization or person. People and organizations are connected through the internet, which enables them to exchange vital information virtual when necessary. Online banking removes traditional banking practices. It enables customers to use services online and virtually through electronic data interchange.

The platform has continued to eliminate the human interactions between the bank and its customers. According to BBC (2014), the UK banks are closing their physical branches and they continue to decline customers the access to their local branches. Customers prefer to use their mobile banking applications to access banking services. However, they use physical services when they want to buy complex products that would require them to visit their local branch. About 2000 bank branches have been shut down for the past five years. Also, McKinsey consultancy focused on 2400 more branches that could be shut down the coming five years. It forecasted that by 2019, complex products such as mortgages would be available through online banking services (Wallace, 2015).

Because of the complexity of electronic data, interchange processes that occur between customers and online banking systems make both banks and customers vulnerable to security threats. Bank institutions are equipped with financial resources and staff’s expertise to help in limiting the risk of fraud within their online operations. Personal customers are normal people with limited ability to understand the complexity of using online banking in their daily lives. Even though online banking services have been showing flexibility to its customers in their daily lives, the security of this platform has been questionable for many of their customers (Durisin, 2013).

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Financial institutions consider it more vulnerable to fraudulent activities. More than half of the total fraud cases reported in the UK estimated that the cost of £236 million came from online banking fraud (O’Murchu, 2015). Online banking fraud figures have risen by 48% in 2014 from 2013. The significant increase has been because of the increasing number of adult customers who use online banking services (Peachey, 2015).

These positive results have been supported by banks through various platforms they use to encourage customers to shift their financial banking needs from traditional banking to online banking interaction. Their emphasis is on the convenience and speed with which they avail online services (Peachey 2015). The shift of banking institutional from traditional banking view to online banking helps the banks to take advantage of cost reduction and innovative services, which can be accessed online by their customers. It enhances effective time management and expands banks’ operational scopes in a wider geographical location (Hanafizadeh & Khedmatgozar 2012).

Because of the negative impacts of the fraud in organizational operations, reputation, and revenue, banks have to investigate any fraudulent event to recover the loss from their customers. Banks need to emphasize on the fraud risk awareness to its customers as a way of tackling fraud which happened due to lack of awareness (Holley 2014). Fraud can be well planned beyond individual customer and banks should make their customers aware of the online risk.

Many online customers are considered to have general basic skills in using computing technological devices such as mobile phones and computers. Knowledgeable customers have the necessary information to prevent themselves from becoming the targets of fraudsters. With the increased awareness among the online customers, the fraud trap will reduce and hence the negative impact on service users and banking institutions.

Customer adoption of electronic devices for internet use engages them in online activities. This is true, especially for online banking services, which are purely based on individual efforts to adopt the technology. Many customers are not focussed on security issues. The majority of them lack the knowledge needed to prevent the risk of fraud from happening to them. According to Aite Group (2014), for banks to ensure a safe online banking environment for customers, they should educate the consumer on how to protect themselves against online banking fraud.

According to the Action Fraud UK initiated by the National Fraud and Cyber Crime Reporting Centre, customers are vulnerable to several online frauds when using online banking in the United Kingdom. These include account takeover, advance fee frauds, bank card, and cheque fraud. Other sources of fraud include business directory fraud, Business opportunity fraud, charity donation fraud, clairvoyant or psychic frauds, click fraud, domain name frauds, fraud recovery fraud, government agency frauds.

Health frauds, holiday fraud, Identity fraud, inheritance fraud, internet auction fraud, Internet dialler fraud, land banking frauds, loan frauds, lottery frauds, mass-marketing fraud. An additional list of online frauds includes miracle health defrauds, money muling, Online shopping fraud, and Plastic card fraud. The last types of fraud are rental fraud, romance defrauds, vehicle matching frauds, West African or 419 fraud, and work from home frauds.

Research Methodology

Research Philosophy

In terms of research philosophy, this study adopted the pragmatic approach because it uses various methods in data collection, presentation, and analysis (Jolley 2013). To get the basic knowledge about online banking fraud, the study applied the qualitative approach in reviewing the previous literature about the topic. These include articles, journals, books, and online resources. The study used a quantitative approach to collect data from the respondents. The questionnaires were used to collect numerical data for the subsequent analysis. Tables with average percentages and standard deviations were used to present results for each of the questions in the questionnaire template. To test the study hypothesis, the researcher used one-way ANOVA as a statistical tool to test the experimental hypothesis.

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Research Approach

The study is based on the deductive approach in which the researcher developed an experimental hypothesis. The study hypothesized that the majority of people living in the UK are aware of online fraud, although a significant number have not had personal experience with it. Based on Shroeder et al. (2011), the researcher used one-way ANOVA as a statistical data analysis to test this developed hypothesis. To conclude the investigative study, the researcher collected the data from the selected sample using quantitative methods.

Data Collection Method

The study relied on both primary and secondary data collection, analysis and discussions. The secondary data was used in the literature review, analysis, and discussion sections. The researcher used qualitative techniques to collect relevant information from books, journals, articles and online resources (Gramatikov et al. 2010: Bamberger 2000). The literature content has studies and information, which had been previously done. To provide new ideas and information to the field of study, the researcher conducted online research to gather primary information (Saunders et al. 2009). One hundred respondents were identified as the study sample size. The researcher used quantitative methods to collect the raw, numerical data from them (Fitzpatrick & Kazer 2012).

Population and Sampling

The population of this study represented the geographical context of London. The researcher believed that sample selected in London would represent the views of the entire people living in the UK. The research targeted a maximum of 100 participants as the study sample size. It included a total of 52 males and 48 females. The study applied a probabilistic sampling method that gave all the 100 participants equal opportunities to participate in the study. All respondents were served with the same questionnaires, which were to be filled as directed by the researcher. The questionnaires were systematically structured to gather information about the correspondents’ awareness of online banking fraud in the UK context. The questionnaires covered various elements of online banking fraud.

Data Analysis

The study applied both logical and statistical approaches to condense both primary and secondary information gathered during the study research. The logical technique was used to analyze the questionnaire-based results. It has been used to integrate the reviewed literature with the study results to establish the relationship between the existing and new ideas. The researcher used one-way ANOVA as the statistical tool to test the significance of the hypothetical framework developed for the study topic: the majority of people living in the UK are aware of online fraud, although a significant number have not had personal experience with fraud.

The validity of the Results

To ascertain the reliability of the data, the intended respondents were contacted 24 hours before the questionnaires were sent to them. The prior communication to the respondents through their email addresses and social media platforms was to inform them about the study intent. That way, they were prepared psychologically and physically to provide the most accurate information. The researcher only served those who replied to the cover letter with the questionnaires. Specifically, the researcher provided the questionnaire to the respondents who were willing to participate in the study. People who are willing to participate in the study have a high probability of giving accurate information.


Before sending the final template of the questionnaire to the target population, the researcher presented them to the supervisor for assessment. Upon submission, the supervisor thoroughly evaluated the questionnaire template to ensure they meet the research standards. Several aspects of the originally formulated questionnaire were revised until they met the expected standards before submitting them to the respondents. That way, the results obtained followed the required guidelines and provided the most accurate information.

Results of the Study

The study results are based on 100 respondents who were contacted through social media and the internet. The survey was conducted twice within one week. During the first period, 64 respondents were reached upon which they received questionnaires that were to feel and returned within 24 hours. Only 46 (71.87%) of the sample size returned filled questionnaires. In the second round of the survey, 75 respondents were served with questionnaires.

Out of this number, 64 (85.33%) of the sample size returned filled questionnaires within 24 hours. It implies that the total number of respondents who filled in and returned the questionnaires were 110. The target of the study was to collect data from 100 respondents. To ensure the resultant data is of high quality, the received questionnaires were further scrutinized to eliminate 10 questionnaires, which were not filled. The results obtained were presented in the following tables.

Importance of Online Banking Services

In terms of the importance of online services to customers, which prompted the first question, responses were divided into three categories. Many of them filled in “very important”, “fairly important” and “not important” boxes. Less than 10 respondents filled in the remaining parts as shown in the table below.

Table 1: Extent of the importance of online banking services to personal customers.

Very Important Important Fairly Important Slightly Important Not Important Don’t Know
To what extend does online Banking is important to you? 20 61 9 3 4 4

Frequency and Mode of Accessing Banking Services

The second set of questions was used to assess how respondents accessed banking services. The questions were created to determine how often the respondents use online banking to access their bank accounts, visit their local branches, and access online banking. From the results, a higher percentage of people used the listed services daily, once a week and once a month respectively. Few people use the services once in 3 months, six months or one year. An average of 48.67%, 33.33%, and 17% used the listed services once a day, once a week and once a month respectively. Approximately 1.0% of the respondents used the services once in three months while less than 1.0% use once in 6 and 12 months. Therefore, the results were filled in as shown in the table below.

Table 2: Results showing the respondent’s frequency and modes of accessing banking services.

How often do you……
Every Day Once a Week Once in a Month Once in 3 Months One in 6 Months Once in a Year
A) Use online banking to access your bank account 67 23 10 0 0 0
B) Visit your local branch 15 55 28 2 0 0
C) Use Online banking services 64 22 13 1 1 0
Average 48.67 33.33 17.00 1.00 0.33 0.00
Sd 29.19 18.77 9.64 1.00 0.58 0.00

Types of Transactions

In this section, the question tended to explore the types of transactions respondents engage when interacting with their banks online. The total (n) in the following table represents those who used the online transaction services indicated in the first column.

Table 3: Types of transactions done.

What type(s) of the transaction do you do when you use online banking? Total (n)
Transfer Money 67
Checking Transaction 69
Checking Balance 57
Other (Credit card payments) 54
Average 61.75
Sd 7.36546


In terms of perception, the set of questions was used to collect the participants’ views about the risks associated with online banking. In terms of awareness, some respondents could not choose between “slightly aware” and “moderately aware”. Some of them ticked both boxes. The same case was witnessed in “moderately not aware” and “slightly not aware” boxes. The first case had four respondents while the second case had three respondents, which were among those eliminated from the study. The following table shows the results.

Table 4: Respondents’ awareness about risks associated with online banking.

To what degree are you aware of the following online banking risks listed below?
Strongly aware Moderate aware Slightly Aware Slightly not aware Moderate not aware Strongly not aware
A) Performance risk 30 29 12 11 15 3
B) Financial risk 41 23 10 10 8 8
C) Time wastages 31 21 18 12 9 9
D) Psychological risk 34 15 16 12 11 12
E) Social risk 36 27 21 6 7 3
F) Online banking fraud 42 25 16 10 6 1
Average 35.67 23.33 15.50 10.17 9.33 6.00
Sd 5.01 4.97 3.99 2.23 3.27 4.29

The Influence of Computer Literacy Level

The objective of the question was to determine the influence of computer literacy on fraud awareness. The level of peoples’ computer literacy determines the way they respond to online risk factors. The risk factors selected for this study are security checks, software updates, insecure websites, and malicious online advertisements. The respondents had no problem checking in the boxes for each category of the question. The results were as shown in the table below.

Table 5: An illustration of how computer literacy helps in curbing risks associated with security, insecure websites, vulnerable software, and malicious advertisement.

To what extent does your computer literacy level help you in performing the following tasks as a way of preventing fraud?
Excellent Very Good Good Fair Poor Very Poor
Security Checks 28 27 18 11 10 5
Software updates 25 24 21 12 10 8
Conscious Visiting Websites 20 25 19 13 11 12
Conscious Clicking Online Advertisements 24 21 20 15 13 7
Average 24.25 24.25 19.5 12.75 11 8
Sd 3.30 2.50 1.29 1.71 1.41 2.94

Online Fraud

Risks associated with online banking come from the fraudulent activities of cyber and online criminals. People’s awareness of fraud depends on their understanding of the various ways in which cybercriminals engage in fraud. Some of the common ways in which fraudsters use to steal money from their victims include e-mails, website advertisements, text messages, website back-links, phone calls, and downloaded software. The participants were asked to state their awareness of the listed factors. The results obtained were presented in the table below.

Table 6: Respondents’ awareness about forms of online fraud.

To what extent are you aware of online fraud (Scams) sent using:
Strongly aware Moderate aware Slightly Aware Slightly Not aware Moderate Aware Strongly Not Aware
E-mails 12 45 23 13 9 8
Text Messages 8 39 27 14 9 2
Website advertisements 11 45 25 12 6 1
Telephone (Mobile Phone) 14 36 22 16 8 4
Redirect Website page 13 41 24 15 6 1
Downloaded Software 16 39 20 13 7 5
Average 12.33 40.83 23.50 13.83 7.50 3.50
Sd 2.73 3.60 2.43 1.47 1.38 2.74

Fraud Terminologies

The question investigates the knowledge of respondents about the terminologies related to online fraud. There are various business activities done over the internet, which constitute fraud. When asked to state other terminologies apart from those listed in the questionnaire, no respondent suggested another terminology. As a result, that section was removed when presenting the results. The majority of the respondents did not understand most of the terminologies. A mean of 72.3 of the total respondents was aware of the fraud terminologies listed in the questionnaires with a standard deviation of 14.64.

Table 7: Knowledge of respondents on online fraud terminologies.

Have you encountered any of these online fraud terminologies? Please tick “Yes” or “No” to ones relevant
Yes No Yes No
A) Phishing 78 22 F)Share Sale (Boiler Room) 53 47
B) Malware 56 44 G) Telemarketing Fraud 88 12
C) Money Mules 69 31 H) West African or 419 Scam 66 34
D) Advance Fee Scams 79 21 I) Matrix and Pyramid Scheme 93 7
E) Lottery Scams 86 14 J) Property Investment Scheme 55 45
Average 72.3 27.7
Sd 14.64 14.64

Online Fraud Related Losses

The question was formulated to investigate the respondent’s knowledge about online fraud in terms of the amount of money lost. In this case, 23% believed that between 100 and 200 pounds were lost in 2014 while 25% believed that banks lost 60-99 million. On the other hand, 37% stated that banks lost 10-50 million while 11% believed they lost 1-9 million. The remaining 4% had different opinions regarding the number of money banks lost to fraudulent activities over the internet. Among those who had different opinions, 3 (75%) of them thought that banks lost more than 200 million pounds on online fraud while one respondent (25%) believed that money lost to online banking fraud is less than 1 million. The results were shown in the table below.

Table 8: Losses banks made because of online fraud.

How much you think online fraud cost in pounds the banks in the year 2014? Please tick one Total Percentage
100-200 million 23 23%
51-99 million 25 25%
10- 50 million 37 37%
1-9 million 11 11%
Other (Please Specify) 4 4%

Impact of Online Fraud on Personal Lives

Customers also incur losses when they engage in fraudulent acts. Such losses have impacts on the mental, physical and social lives of customers. The question is framed to investigate the different impacts that online fraud has on the respondents. The listed impacts included service dissatisfaction, emotion, depression, social life, sleep, and physical well-being. Respondents who were not aware of any of the listed impacts were asked to provide their specific impacts.

Approximately 28.5% of the total respondents were strongly aware of the listed personal impacts, 20% are moderately aware while 19% are slightly aware with the standard deviations of 14.32, 9.09 and 2.90 respectively. Approximately 4.29%, 8.67%, and 8.5% were slightly not aware, moderately not aware and not aware respectively. These include standard deviations of 4.15, 5.5 and 6.35 respectively. The results were presented in the table below.

Table 9: Impacts of fraud-related losses on customers.

What level of awareness do you have about the impact of online fraud on you as an online banking customer? Tick one of the numbers in the scale 1 to 6. 1= Strongly aware, 2 = Moderate aware, 3 = Slightly Aware, 4= Slightly Not aware, 5= Moderately Not Aware; 6= Not Aware
Scale 1 2 3 4 5 6
Service Dissatisfaction 34 24 17 9 11 5
Emotion 37 21 20 8 10 4
Depression 35 25 23 1 4 12
Social life 27 21 15 9 13 15
Sleep 44 22 21 2
Physical Wellbeing 23 27 18 1 14 15
Other (specify) 0 0 0 0 0
Average 28.57 20.00 19.00 4.29 8.67 8.50
Sd 14.32 9.09 2.90 4.15 5.50 6.35

Another question was developed to investigate the impacts of online banking fraud on customers. In this case, respondents were asked to state their experiences with fraudulent activities. Approximately 52% of the respondents had been victims or had heard about victims of online fraud with a standard deviation of 26.08. About 41.7% had not heard while 6% never preferred to say with standard deviations of 27.18 and 1.63. Also, 16% of the total respondents cited other sources of victimization. Of this group, 80% cited online reviews while 20 percent stated the social media platform as their sources of information. The results were presented in the table below.

Table 10: Information about online victims of banking fraud.

Please tick “Yes” or “No” or “Prefer not to say” If
Yes No Prefer not to say
You have been a victim of online fraud 50 42 8
You know Someone who been a victim of online fraud 68 25 6
You did hear about people who have been victims of online fraud from any media 74 20 6
You have heard from other sources (Please specify) 16 80 4
Average 52.00 41.75 6.00
Sd 26.08 27.18 1.63

Bank Services used to Control Online Fraud

Banks are the major stakeholders in the online money transfer sector. Different banks offer different services to respond to customers’ problems and experiences. The question was framed to investigate the awareness of respondents about control measures that the bank has established to control online banking fraud. Approximately 60.33% are strongly aware of the services, 17.33% were moderately aware while 10.33% were slightly aware with standard deviations of 4.51, 6.35 and 0.58 respectively. On the other hand, 6.33% were slightly not aware, 3.33% were moderately not aware while 2.33% were strongly unaware with standard deviations of 2.08, 0.58 and 1.53 respectively. The results were presented in the table below.

Table 11: Investigative results of online banking risks and anti-fraud awareness.

What is your level of agreement with Statements “A” and “B”
Strongly aware Moderate aware Slightly Aware Slightly Not aware Moderate Aware Strongly unaware
A) I am aware of the risks from online banking 60 21 10 4 3 2
B) My bank provides Free Anti-Virus for my online banking 65 10 10 7 4 4
My bank provides adequate support against online fraud 56 21 11 8 3 1
Average 60.33 17.33 10.33 6.33 3.33 2.33
Sd 4.51 6.35 0.58 2.08 0.58 1.53

Creating awareness about Online Banking Fraud

Although the majority of people are aware of online banking fraud in the UK context, a significant percentage is still ignorant of the fraudsters and their activities. The objective of this question was to explore the understanding and awareness of customers about the support provided by banks to stop online fraud. Several institutions offer different services to prevent their customers from succumbing to fraudulent activities. These include Bank of England, Financial Ombudsman, Prudential Regulation Authority, Money Advice Services, and Financial Fraud Action UK among others. An average of 64.5% of the respondents was aware of these supports while 35.5% were unaware of the standard deviations of 6.28 in each of the two cases. No respondent provided other alternatives.

Table 12: Respondents awareness of the support by banking institutions.

Are you aware of the role of this organization in online fraud?
Yes No
A) Bank of England 67 33
B) Financial Ombudsman 72 28
C) Prudential Regulation Authority 69 31
D) Financial Conduct Authority 56 44
E) Money Advice Services 65 35
Financial Fraud Action UK 58 42
Other (please state here )
Average 64.50 35.50
Sd 6.28 6.28

Communication Channels for Creating Online Fraud Awareness

The question is also about education and awareness initiatives developed by banks to protect customers. Respondents were asked to state the media of communication banks use to educate and inform their clients about online banking frauds. An average of 38.2% of the respondents had received information about the online frauds from their banks through various channels of communication. The results of those who have received awareness information include the standard deviation of 25.32.

On the other hand, an average of 61.71 of the respondents with a standard deviation of 25.32 had not received the awareness information from their banks. When asked if they were aware of other channels through which banks communicate with their clients, 73% of the respondents cited various internet platforms. Approximately 60% cited social media, 28% cited blogs and forums while 12 cited other websites.

Table 13: Communication channels used by banks to educate their clients.

Has your bank made you aware of online fraud before?
Yes No
In the branch 21 79
By E-mail 34 66
By Telephone 11 89
On Bank website 67 33
Other organization 49 51
By letter from the bank 13 87
Other (specify) 73 27
Average 38.29 61.71
Sd 25.32 25.32

Forms of Communication Preferred by Customers

The results showed insignificant differences in terms of the preferred communication channel. The majority of respondents preferred social media, bank websites, telephone, and email to other channels. On the other hand, the majority did not like the idea of getting information from other organizations rather than their banks. In terms of the above average (5-8), approximately 50.2% of the respondents preferred to get assistance from the listed options. No respondent suggested other preferred channels of communication.

Table 14: The preferred communication for fraud awareness among customers.

What forms of communication would you prefer banks to use to increase your level of risk awareness on online fraud? Using Scale 1 to 8: 1 is “The Least Preferred” and 8 is “The Highest Preferred”.
Scale 1 2 3 4 5 6 7 8
A) In the branch 12 23 22 10 12 13 13 14
B) By E-mail 6 7 9 10 15 17 18 18
C) By Telephone 5 8 10 12 15 16 16 18
D) On Bank website 4 6 8 8 14 14 15 21
E) Using Other organization 22 14 14 13 10 7 5 5
F) By letter from the bank 5 7 8 10 13 15 15 16
G) Via Social Medias 5 8 9 11 12 15 16 25
H) News Paper 22 11 8 9 14 8 13 15
I) Other (specify) 0 0 0 0 0 0 0 0
Average 9.00 9.33 9.78 9.22 11.44 11.33 12.11 15.44
Sd 7.74 5.68 4.87 1.60 1.89 3.62 3.93 6.25

The Suggested Modes of Creating Online Frauds Awareness

The banking sector suffers significant losses because of online fraud. Banks need to educate their customers on how to avoid fraudsters. The question assesses the customers’ preferred modes of receiving fraud awareness information from their banks. In general, approximately 22% of the respondents were most likely to use various forms of communication to get online fraud information with a standard deviation of 22.18. About 7.5% of the respondents were less likely to use any of the listed means of communication. Approximately 56% were most likely to use other modes of communication. Among this group, 67% preferred social media while 33% preferred their bank websites to other modes of communication.

Table 15: Suggested modes for banks to explain to their customers using examples of online frauds.

Would you like your bank to explain to you using examples of how different types of frauds get committed online to increase your level of risk awareness? Using Scale 1 to 8; 1 is “least likely” and 8 is “very likely”
Scale 1 2 3 4 5 6 7 8
A) By using video 25 16 15 14 13 9 6 2
B) By Text 3 5 10 13 14 14 15 26
G) By Face to Face Explanation 2 6 11 13 15 15 16 24
H) Other (specify) 0 0 0 0 10 10 25 56
Average 7.50 6.75 9.00 10.00 13.00 12.00 15.50 27.00
Sd 11.73 6.70 6.38 6.68 2.16 2.94 7.77 22.18

Perceptions of Customers on Fraud Awareness Information

The perception of customers regarding information banks give about online fraud determines the outcomes of fraudulent activities. The question was aimed at exploring the respondents’ perceptions about the information they get from their banks regarding online fraud. In this case, 61% of respondents strongly agreed that their banks provide them with adequate information about online fraud. About 57% of them strongly agreed that they need more fraud information. Generally, all the 100 respondents agreed with the two statements.

Table 16: Perceptions of customers about fraud awareness information.

What is your degree of agreement on statement “A” and “B” below
Strongly agree Moderately Agree Slightly Agree Slightly Not Agree Moderately Not Agree Strongly Not Agree
A) Do you agree that the information provided by your bank about online fraud awareness is adequate 61 25 14 0 0 0
B) Do you need more awareness about online fraud risk 57 34 9 0 0 0

Other Information

The respondents were asked to state other things that could be done to protect them from online fraud. Approximately 91% of the respondents cited the use of government interventions while 5% stated that banks should use traditional media such as TV and radio to educate customers. The remaining 4% did not state additional intervention strategies. Among those who cited government interventions, 67% named government regulations on cyber policies as the best strategy to protect consumers from cyber-criminal. From the remaining number, 24% identified the use of law enforcement agencies while 9% suggested government-sponsored public forums and educations. The results were presented in the table below.

Table 17: Other sources of information about online fraud.

What other things could be done by your bank to protect you from online fraud? Please list here below if necessary.
Government intervention 91
TV and Radio (Traditional Media) 5
No other options 4

Participants Demographics

Education Level

The participants were asked to state their education. The level of a person’s education determines their level of understanding of online banking fraud. The education levels of the participants’ education were recorded in the table below.

Table 18: Participants’ level of education.

Education Level:
College (Certificate and Diploma)
University (Degree and Above)
Other (Please specify)
Tick Below


The participants whose education levels were college and above were asked to indicate their areas of specialism or profession. Those who were in other professional fields were 7% and they stated sports and online freelance work as their occupations. The majority of the respondents (25%) were business people who conduct their business operations over the Internet. The results were recorded in the table below.

Table 19: Participants’ professions.

If your level of education level is College or University please indicate your area of specialism
Subject (Major) Total (n) Subject (Major) Total (n)
A) Accounting/Finance 8 F) Nursing 15
B) Business 20 G) Politics 6
C) Computer Science/IT 6 H) Engineering 4
D) Law 7 I) Arts/Fashion/Media 9
E) Medicine 8 J) Language/Teaching 7
Other (please state here ) 7


The majority of the respondents (34%) were self-employed. While some were business people, others ventured into self-employment options in their areas of the profession. Apart from the listed occupational options, no participant stated other forms. The results were presented in the table below.

Table 20: Respondents’ occupation.

19. Occupation:
Self Employed
Not Employed
Other (Please specify)
Total (n)

Age group

The sample selected for the study was categorized based on their age. The age of the respondents determined their answers to the study questions. The youthful people aged between 18 and 44 formed the highest number with 80% of the total respondents. Also, they indicate 94.2% of awareness level about the various aspects of online fraud. The study did not capture people aged 65 and above. The majority of people (86%) of the respondents aged 55-64 and 74% of those aged 45-54 were unaware of various aspects of online fraud asked in the above questions. However, the degree of their unawareness varied.

Table 21: The participants’ age brackets.

20. Age Group:
18 – 24
25 – 34
35 – 44
45 – 54
55 – 64
65 and Above
Total (n)


In terms of gender, 52 were males while 48 were female. No respondent indicated other forms of gender. The gender did not have a significant effect on their level of understanding. The results were presented in the table below.

Table 22: The participant’s gender categories.

Prefer not to say
Total (n)

Analysis and Discussions

One-Way ANOVA Analysis

ANOVA is among the descriptive tools in statistics, which are used to test a research framework. It is an acronym, which stands for the Analysis of Variance and it is a technique used in testing the study hypothesis. It tests difference or equality between two or more population means. It assesses whether a difference between two or more population means is because of the sampling error or the difference results from a systematic aspect.

Before using the tool to determine the significance of the study hypothesis, it is essential to revisit the hypothetical framework developed to guide the study. The main objective of the study was to assess the level of online banking fraud awareness among personal customers in the UK. As a result, the researcher developed an experimental analysis as well as a null hypothesis. It is important to note that the null hypothesis rejects the experimental hypothesis. According to the null hypothesis, no significant differences exist between awareness and unawareness of online banking fraud among people living in the UK. This is opposed to the experimental hypothesis that tends to prove a significant difference between awareness and unawareness.

Using a study sample randomly selected from the London context, the researcher collected the data aimed at disapproving the null hypothesis. The use of one-way ANOVA will be essential in determining the significance of the study. Based on the questionnaire, there are several instances where the study tested respondents’ awareness. The following part analyses several aspects of the questionnaire to prove the study’s significance.

Testing the Study Significance

The second part of the questionnaire assesses the frequency with which customers use banking services. The number of times a customer uses an online platform determines their level of awareness about online banking activities and related fraud. In this case, the significance of the results was tested using ANOVA and the results were shown in the following table.

Table 23: The analytical results for frequency and mode of using banking services.

Groups Count Sum Average Variance
Column 1 3 146 48.66667 852.3333
Column 2 3 100 33.33333 352.3333
Column 3 3 51 17 93
Column 4 3 3 1 1
Column 5 3 1 0.333333 0.333333
Column 6 3 0 0 0
Source of Variation SS df MS F P-value F crit
Between Groups 6275.611 5 1255.122 5.797331 0.005992 3.105875239
Within Groups 2598 12 216.5
Total 8873.611 17

The value of F (5.797) is greater than the value of F crit (3.106). Therefore, we reject the null hypothesis. On the other hand, the experimental value of P (0.006) is less than the theoretical value of P (0.05), which shows the significance of the study results. The mean of those who use various banking services daily is higher (48.67) than those who use it once in a week (33.33), once a month (17), once in six months (0.33) and once a year (0). The frequency with which an individual uses a service determines the person’s awareness of many aspects of the service, including fraud. A large number of respondents use online banking services every day and once a week. A significant number rarely uses the services.

In the current world dominated by technology, people use their electronic devices to do various transactions over the internet. The availability of cheap electronic devices encourages people to use online services that offer better experiences than physical services.

The types of transactions personal customers engage in determine their level of awareness. Based on table 3 above, more than 61% of the respondents had used an online banking platform to transact various businesses. The results in table 3 support the analytical results presented in table 23. The results show that majority of people are aware of several issues including online fraud. The more individuals use a system is the more they develop the understanding and awareness of it.

The Level of Risk Awareness

Personal customers of different banks are exposed to several risk factors when accessing online services within the United Kingdom context. The analysis in Table 24 shows a significant difference in the way people identify risk factors that contribute to fraud. Since the value of F is greater than that of F crit, the outcome of the analysis supports the study hypothesis. On the other hand, the experimental value of P is less than the theoretical P (P=5.41E-13< P=0.05). A significant number of people are aware of the risks contributing to online fraud. The table below shows the results.

Table 24: Testing the level of risk awareness.

Groups Count Sum Average Variance
Column 1 6 214 35.66667 25.06667
Column 2 6 140 23.33333 24.66667
Column 3 6 93 15.5 15.9
Column 4 6 61 10.16667 4.966667
Column 5 6 56 9.333333 10.66667
Column 6 6 36 6 18.4
Source of Variation SS df MS F P-value F crit
Between Groups 3699.667 5 739.9333 44.54448 5.41E-13 2.53355455
Within Groups 498.3333 30 16.61111
Total 4198 35

One of them is the performance risk, which closely relates to poor services. When an online platform performs poorly, the probability of a customer losing money is very high. Fraudsters use this aspect to hacking bankers’ systems to steal money from people. Financial risk is the main factor because business transactions with banks involve money. Suspicious banking services automatically lead to financial losses. Time wastage is part of the risk factors contributing to fraudulent activities. When there are shortfalls in the system, the probability of cybercriminals intercepting the system is very high.

The level of computer literacy has a significant impact on people’s awareness of online fraud. The majority (78%) of the respondents have above-average knowledge in computer and related devices. Computer literacy determines the understanding of an individual about online fraud. However, a significant number of people who are computer literate do not understand how they can use their knowledge to detect and avoid online banking fraud. The main contributing factor is the frequency with which they apply the knowledge. When a person uses the computer knowledge to access the internet and transact several activities in a day, the probability of avoiding fraudsters is very high. On the other hand, a computer literate who rarely accesses the internet or use internet tools to conduct business does not understand how online platform works. As a result, they succumb to deceitful actions of fraudsters.

Online Fraud Awareness

From the test, the value of F (173.7) is greater than the value of F crit (2.534) while the experimental P-value (3.35E-21) is greater than the theoretical P=0.05. Based on the experimental hypothesis, the majority of people are aware of the fraudulent activities conducted over the internet. However, a significant number (25.83%) of people in the UK are not aware of online banking fraud. That percentage reflects the number of personal customers who might succumb to fraudulent activities because they lack awareness.

Table 25: Testing online fraud awareness.

Groups Count Sum Average Variance
Column 1 6 74 12.33333 7.466667
Column 2 6 245 40.83333 12.96667
Column 3 6 141 23.5 5.9
Column 4 6 83 13.83333 2.166667
Column 5 6 45 7.5 1.9
Column 6 6 21 3.5 7.5
Source of Variation SS df MS F P-value F crit
Between Groups 5487.25 5 1097.45 173.7388 3.35E-21 2.533555
Within Groups 189.5 30 6.316667
Total 5676.75 35

Also, the analytical results presented above are supported by the results in table 7 above. More than 72% of the respondents are aware of the terminologies used to describe types of online frauds. Having 18% percent of respondents unaware of the terminologies is worrying. It raises an alarm for the UK banking sector to expose 18% of its customers to online fraudsters. Considering millions of money the UK banks are currently losing to fraudsters, as suggested by all respondents, exposing 18% of their customers to risks would be an additional problem. Customers who lose money while interacting with their banks online suffer personal problems, which could be physical, psychological or both.

Creating Awareness

Online banking fraud is a reality that UK banks cannot ignore. Although many people continue to use online services because of flexibility, banks could still lose a significant amount of money without appropriate measures. The above-average of the UK population uses online banking services. However, they are highly susceptible to fraud. Banks should adopt various mechanisms through which they create awareness about online frauds. It is because customers are willing to be aware of any form of fraud. Many people have been victims because of ignorance.

However, many banks have also made significant efforts to educate their online personal customers about banking fraud. Furthermore, various institutions have decided to create awareness about online banking fraud and related cyber crimes. These include the Bank of England, Financial Ombudsman, Prudential Regulatory Authority, Financial Conduct Authority, Money Advice Services, and Financial Fraud Action.

These institutions provide advice to both individuals and business organizations. Higher percentages of people who are aware of banking frauds over the internet are willing to use the advisory services offered by these institutions. The majority of personal customers have shown the willingness to accessing awareness information. Both women and men have had a similar experience with online banking frauds. Therefore, education about fraud awareness should involve everybody irrespective of gender.


From the mid-1990s going backward, banks preferred face-to-face services when dealing with customers. On the other hand, customers also believed in physical contact when transacting business with their banks. These included balance inquiries, withdrawals, deposits, and account openings among others. In the wake of the 21st Century, technology began to penetrate the banking and other business sectors.

The rapid development of internet and information technology in the mid-2000s enhanced the introduction of several online services. Also, the introduction of mobile devices such as computers, tablets, and smartphones increased the visibility of both customers and business entities online. Nevertheless, as the number of users increases the number of cybercriminals also increases. Their main target has been to steal money from ignorant online users. When customers lose money through online fraud, their banks also make significant losses. The findings of this study show that many people are aware of online banking services as well as fraudulent activities.

At the same time, the idea of using electronic gadgets to transact business benefits both banks and their customers alike. Consequently, both banks and personal customers prefer to use online services to traditional banking systems. To increase the benefits, banks, non-banking institutions, and the government should establish awareness initiatives aimed at improving the public’s awareness of online fraud.

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