New research by Tunic Pay and Opinium has showed that efforts by banks to add friction to instant transfers as a way to curb scams are ineffective, as customers overlook these measures. This study, conducted with 2,000 UK adults, reveals that these strategies do not appear to impact users' decisions, even though a recent regulation by the Payment Systems Regulator mandates that UK banks compensate customers who fall victim to APP scams, with coverage up to GBP 85,000 per incident.

Officials from Tunic Pay remarked that the PSR’s new regulations put greater pressure on banks to tackle the potential GBP 4 billion problem of APP fraud. Banks have invested heavily in creating friction to make customers think carefully about their payments, but the impact has been limited. If two-thirds of users are ignoring warnings, the system isn’t working, and fraudsters benefit.

Slowing payments doesn’t mean slowing fraud. Most UK adults (85%) are aware of their banks' anti-scam measures, with those who have been scammed showing higher awareness (90%) than those who haven’t (82%). Popular scam prevention tactics include: Asking customers to confirm the identity of the person they’re paying (43%)  Providing warnings about fraud risks (41%)  Requiring biometric identification, such as fingerprint scans (38%).

However, these strategies seem to have little effect on users' payment behavior. Only 33% of UK adults actually read fraud warnings before making a payment. Only 32% find these warnings helpful for slowing down and considering their transactions.

Three-quarters of UK adults (75%) feel that delaying payments for up to 72 hours is ineffective for fraud prevention, and 73% think that requiring them to call their bank to verify payments is equally ineffective. Customers of digital or challenger banks are slightly less likely to read each warning (30% compared to 36% for traditional bank users), but they are marginally more inclined to view warnings as effective (35% vs. 34%).

Can preventative action replace the friction? Around 15% of respondents want banks to reduce reliance on warnings and instead adopt more sophisticated technologies to detect scams proactively. This preference rises to 21% among customers of digital and challenger banks. Nearly a third (30%) of UK adults suspect that these bank warnings are more about shifting responsibility for fraud onto customers.

This view is more common among older adults (34%) compared to younger adults (25%) and slightly more prevalent among customers of online banks (36%) than traditional banks (32%). Customers are frustrated with outdated fraud prevention tactics that don’t meet their needs. They expect banks to prioritise advanced, proactive security features over delays and warnings that ultimately place the burden on customers.

This shift represents a critical opportunity for fintechs and a strong incentive for banks to focus on real-time detection and smarter safety tools. .