How Fraud and Scams Are Reshaping Customer Trust and Expectations in Banking

Key findings from the research 

• 30% of Australians have fallen victim to fraud or scams. 

• 89% say banks are responsible for education, monitoring or fund recovery following a scam. 

• Only 36% believe larger banks are better equipped to prevent fraud. 

• 27% believe a smaller bank would provide more personalised care in a fraud incident (rising to 40% among Cuscal client customers). 

Fraud and scams are reshaping the trust equation in banking. As they become more frequent and harder to detect, customers are judging their bank not just on products or price, but on how well they protect, inform and support them when it matters most. 

New research from Cuscal, in partnership with Visa and FiftyFive5, shows that fraud and scams response and protection is emerging as a critical driver of customer trust, satisfaction and loyalty. 

The findings also challenge a long-held assumption. Larger banks are not automatically seen as better equipped to protect customers. Instead, institutions that deliver proactive protection, clear communication and genuine human support are better positioned to build trust, regardless of their size. 

This article explores how customer expectations are evolving and where financial institutions can strengthen loyalty and trust. 

Fraud is reshaping how customers choose and trust their bank 

Fraud and scams are now a routine part of everyday financial life in Australia. More than half of Australians encounter fraud or scam attempts at least weekly, and 30% say they have already fallen victim. 

At the same time, scams are becoming harder to detect. 76% of Australians believe fraud and scams are becoming increasingly difficult to identify, reflecting the growing sophistication of fraud tactics. 

This combination of frequency and complexity is reshaping how customers evaluate their bank. Fraud is no longer just a risk event. It is becoming a key moment that shapes trust. 

The research also highlights a shift in perception: 

• Only 36% of customers of Cuscal banks believe larger banks are better equipped to prevent fraud, compared with 52% across the market. 

• 27% of Australians believe a smaller bank would provide more personalised care during a fraud incident, rising to 40% among customers of Cuscal clients. 

These findings suggest that trust is not automatically flowing to larger institutions. Instead, customers are placing greater value on how their bank protects and supports them, particularly in moments where they need clear guidance and reassurance. 

This shift is changing what customers expect from their bank. 

Protection, clarity and reassurance: how customer expectations are evolving 

1. Customers expect their bank to act as the first line of defence 

Customers now see their bank as responsible for protecting them from fraud. 

Customers increasingly view their bank as the primary point of contact when fraud or scams occur. They expect institutions to lead across prevention, monitoring, response and recovery. This expectation is reflected in the research.  

89% of Australians say banks and financial institutions are responsible for education, monitoring or fund recovery following a scam. 

For banks, this marks a shift to proactive protection. Customers expect to be safeguarded before, during and after a fraud event. Banks need to strengthen early detection, real-time monitoring and proactive intervention. 
 

2. Perception of trusted communication channels 

Trust in communication is declining, and channel choice now matters more than ever. 

77% of Australians say they are becoming more distrustful of many communication channels due to fraud and scams. 

Trust is concentrated in a small number of channels. In-app messages and email are the most trusted, while phone calls and SMS are viewed with greater scepticism. 

This raises the bar for how banks communicate. Messages need to be delivered through secure, familiar environments and be clearly identifiable as legitimate. 

Banks should prioritise trusted channels and ensure communication is clear, consistent and recognisable as genuine. 

3. Ongoing education and transparency 

Customers expect banks to actively help them stay ahead of fraud. 

Customers are increasingly looking to their bank for guidance on how to stay safe. There is strong demand for proactive education and transparency. 

86% of Australians want to be informed about new scam tactics, while 78% want regular updates on security improvements. 

Customers also want clarity on how banks are protecting them and on their own responsibilities. 

Banks have an opportunity to take a more active role in education and make transparency a core part of their fraud strategy. 

4. Strong security, even if it adds friction 

Customers are willing to trade convenience for stronger security. 

As fraud risks increase, customers are more willing to accept additional steps if it improves protection. The optimal experience is two to three additional security measures. This provides reassurance without creating unnecessary complexity. 

Only 2% of Australians say they do not want any additional security layers. 

Banks can introduce stronger protections with confidence, provided the experience remains simple and intuitive. 

5. Empathy and human support during recovery 

How banks respond to fraud is becoming a defining moment of trust. 

Fraud and scams have a significant emotional impact. Many victims experience embarrassment, anxiety and a loss of confidence. 

Customers expect more than financial recovery. They want reassurance, clear guidance and supportive communication. 

The response during these moments can shape long-term trust and loyalty. Empathetic, human support is becoming a core capability for financial institutions. 

Turning Fraud Prevention into a Trust Advantage 

Fraud is becoming a defining moment of customer trust. 

Customers are placing greater weight on how their bank protects and supports them, especially when it matters most. Larger institutions are not automatically seen as better equipped. Instead, banks that deliver proactive protection, clear communication and genuine human support are better positioned to build trust. 

For financial institutions, this creates a clear opportunity. Those that respond effectively can turn fraud from a risk to manage into a point of differentiation. 

To explore the full findings and insights, read Cuscal’s State of Fraud and Scams in Australia 2026 report.