New Entersekt data report reveals 43% of consumers would switch financial institutions over authentication methods

‘The State of Digital Banking Security’ report examines the link between consumer preference and financial security value

ATLANTA – August 20, 2026 – Entersekt, a global leader in digital banking fraud prevention and payment security, today announced the findings of its “State of Digital Banking Security” report, which provides crucial insights from more than 400 U.S.-based respondents concerning their perspectives on digital banking, fraud prevention, and authentication services provided by their primary financial institutions (FIs).

The new digital banking security report reveals that a FI’s approach to fighting fraud has become a key way to stand out in the market, especially since federal statistics indicate consumers lost upwards of $12.5 billion to fraudulent activity in 2024. The survey, which polled U.S participants whose primary FIs are community/local banks, credit unions, and regional banks, exposes a disconnect between legacy security methods FIs deploy and the modern technologies that consumers actually trust are secure.

“The authentication landscape must balance complex security requirements, evolving fraud threats and growing user experience expectations,” says Trace Fooshée, Strategic Advisor for Datos Insights. “The FIs that prioritize identifying where the line of acceptable friction is for consumers will improve the authentication experience while enhancing security.”

Findings from the report show that 43.2% of respondents said they would consider switching FIs based on provided authentication methods alone. Additional key takeaways include:

• Security is a primary competitive differentiator for FIs.
  When fraud is inevitable, consumer trust and institutional reputation rely on the deployment of robust defensive strategies.
• Fraud prevention drives FI selection, yet authentication gaps remain high.
  While more than 90% of survey respondents cite fraud prevention as a top factor when choosing a FI, 41.1% blame the authentication method utilized by their FI for their experiences with fraud.
  
• Legacy, over-utilized authentication methods create a clear expectation gap.
  Although 46.7% of respondents report their FI still uses one-time passcodes (OTP), only 18.2% view OTPs as the most secure authentication method. This conflicts with the 60% of respondents who said they expect their FIs to choose the methods that are most secure.
  
• Strategic friction is viewed positively, but consumers demand active participation in the fraud prevention experience.
  While 82.5% of respondents trust FIs to accurately identify suspicious transactions, they still want control in the process. Specifically, 27.6% want to define which types of transactions are flagged for their approval, and 24.1% want to actively choose which methods they use to verify their identity.

“We are at a critical tipping point in the financial services industry. Fraud attempts are inevitable, making best-of-breed security more than just a defensive measure, but a powerful market differentiator," says Entersekt Chief Strategy Officer Dewald Nolte. “As fraud evolves, financial security prevention must prioritize authentication efficiency to maintain customer trust and secure consumer loyalty. The findings in this report clearly show that consumers are educated on authentication methods and will reject the friction of those that are overutilized like OTP– actively seeking institutions that prioritize modern security.”

The full report can be found here.