Digital financial literacy for socioeconomic inclusion and equity

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Trust on and risks of digital financial services

INTRODUCTION

Digital financial services have become increasingly important for financial inclusion, but they also come with risks that need to be understood and managed. Trust is crucial when it comes to digital financial services. For each person as well it is important to acquire the resistance to fraud which is one of the financial literacy competences.

The Eurobarometer survey (2022) published by European Commission shows how Europeans interact with the financial services world, in particular given its ever-increasing digitalisation. Overall, 86% of Europeans say that they feel confident in managing their personal finances, and 73% feel confident with banking online. However, the results vary across Member States, gender, age, and level of education – showing the need for continued attention to financial literacy.

About one in five Europeans say that their financial rights were breached, for instance when opening a bank account, making payments, or taking out a loan. Among them, 42% did not file a complaint, which may call for improved channels for citizens to enforce their rights.

What is Digital Trust?

 

In financial services, digital trust is a principle when a bank or financial institution is highly confident in two key factors. First, that the person with whom they are dealing through digital banking channels really is the person they are claiming to be; and, second, that the person is authorized to perform the financial transaction or task they want to perform. In practical terms, it’s a digital handshake between a bank and a customer where both parties meet and transact together with confidence.

But it’s important to note that digital trust also applies to customers, not just banks. As fraudsters get inventive with their tactics, bank customers want assurance that their financial institutions can keep them secure. Just as banks want to have confidence that they are dealing with the people who they claim to be, bank customers expect their banks to know who they are and how they normally transact. If something about their behaviour seems suspicious, customers expect their banks to be able to keep them secure.

Banks can build an understanding of how their customers normally behave by building a digital profile based on their behaviours. This begins with the information the customer provides during the onboarding process and continues to refine over time. Each transaction, mobile device, and new address adds to the profile and helps banks understand who their customers are and how they normally transact.

For the digital trust it is important both – banks and customers expect to be able to engage and interact with each party with confidence and security.

For building trust it is important:

  • Security: Trust grows when we know our money and personal information are safe. Look for services with strong security measures like encryption and two-factor authentication.
  • Reputation: Choose services from well-known companies or banks.
  • User Reviews: Read reviews from other users. If many people trust a service, it’s a good sign.
  • Transparency: Trustworthy services are open about their fees, terms, and how they handle your data.

There are different types of fraud, and it is important to recognise them and know how to protect yourself against them.

The purpose of phishing is to steal your personal data, payment details, funds in your accounts and/or install malware and viruses on your devices. This is probably one of the most common types of fraud in Lithuania, where fake SMS, chat app (WhatsApp, Viber, etc.) messages or emails resembling messages from financial institutions, law enforcement agencies or other entities are sent. The purpose is to obtain internet bank login and other confidential data, to confirm fraudulent fund transfers, etc. The interception of email correspondence is also common, with fraudsters pretending to be business partners who want to verify an account number.

Illegal provision of investment services – an activity where investment services are offered (provided) without a licence issued by the Bank of Lithuania or a supervisory authority of another Member State. The most common example of illegal provision of services is the advertisement of services of companies established in a foreign country (Vanuatu, Belize, Seychelles, etc.) in Lithuania, offers to invest in the Forex currency market, commodity markets, virtual assets on websites or by phone. People who are tempted by these opportunities often lose their entire savings!

These are cases where scammers swindle large sums of money by getting to know their victims online (social networks, dating sites, apps). There are a wide variety of scenarios of romantic scams, such as: pretending to be a famous person whose payment card has been blocked, being asked to transfer a certain amount of money, creating a fake profile on social networking sites, or being lured by money because of a supposedly difficult financial situation.

Money mules are increasingly being used to launder stolen or otherwise illegally obtained money, as well as money used to finance criminal activities. These are people who “lend” their bank account for a fee to withdraw money or transfer it to another account, open an account in their own name and allow others to use it.

The origin of the illegally obtained money is often linked to data theft, the use of malicious software, online fraud, fake e-commerce, phishing, impersonation of company executives, fake romantic relationships, etc.

“I’ll lend you money if you pay”. Scammers offer to give you a loan (often on unusually good terms), but you have to pay them first. Look out for cases where it seems too good to be true, check the identity and activities of the potential lender, check publicly available sources.

You receive a notification (often from abroad) that you have inherited a very large sum of money, but in order to receive it you must first pay (for administering the inheritance, transferring the money, etc.). Evaluate whether this message seems too good to be true or whether you expected to receive an inheritance from such a person. Be critical of any unexpected announcements about property belonging to you.

You are asked to donate to a charity, but the money you donate ends up in the hands of a scammer instead of where it should. Always verify the identity of the organisation or association to which you donate. Make sure that the account to which you are transferring the money matches the publicly available account number of the organisation or association in question.

Human hands during discussion of business document in touchscreen at meeting

This type of fraud is most often perpetrated by legal entities. They are sent a fake invoice, which is then sent to the fraudsters. Always make sure that you have actually received the goods or services for which the invoice was issued, and check the sender and the email address from which it was received. If you are suspicious, call the service provider or the seller of the goods on the telephone number they have and check the authenticity of the invoice you have received.

“Account changed – enter elsewhere.” You have received a notification that the account number of a service provider or seller of goods has changed and you are now being asked to make payments to another account. Always be critical of the sender of such information and the email address from which the information came. If you are suspicious, call the service provider or seller of the goods at the telephone number they have available to verify the authenticity of the information received.

“I’ve had an accident”. Scammers use people’s emotions and desire to help others to call potential victims (usually elderly people) pretending to be a relative or a representative of an institution. They tell them about the disaster and ask for financial help for medical treatment or to repay a debt they have incurred because of the consequences. Always be critical of who is really calling and do not rush into making any payments. If you have any suspicions, call your loved one yourself, using the phone number they have, or the publicly available phone number of a particular institution.

Safe digital finances tips

  • How to protect your personal data properly?

Do not disclose your payment instrument login details, PIN codes, payment card CVV code, card number, e-banking user ID, etc. to anyone. Be careful when sharing any kind of information on social networks, and avoid posting personal information on public computers. It is very important to know: your payment card details are never used to credit the account.

  • Are your mobile devices and computer safe?

Use a valid anti-virus, use only the official mobile app of the payment service provider and log out after each session. Make sure it is not a scam before clicking on any web links you receive. Never enter PINs or other details on sites you are not sure are trustworthy, even if the link is from a trusted person.

  • Do you choose your passwords responsibly?

They should be complex enough to prevent others from guessing them, regularly changed and known only to the user.

  • Where to go if you are caught in a scam?

If you realise you may have been defrauded, immediately contact the bank or payment service provider handling your account and the police. Act immediately and explain the circumstances in detail. This is crucial to stop the transactions and/or recover the money.

Questions for self-assessment

  1. Feedzai, 2022, “Why Digital Trust Should Be a Top Priority for Banks”, available at: https://feedzai.com/blog/why-digital-trust-should-be-a-top-priority-for-banks/
  2. European Commission , 2022, “Eurobarometer survey highlights how Europeans interact with the financial services world”,  available at: https://ec.europa.eu/commission/presscorner/detail/en/IP_22_6162
  3. Lietuvos bankas, sukčiavimas, available at: https://www.lb.lt/lt/sukciavimas
  4. European Union, Retail Financial Services and Products, available at: https://europa.eu/eurobarometer/surveys/detail/2666   

DIGFINLIT: Digital financial literacy for socioeconomic inclusion and equity | Project No 2023-1-LT01-KA220-ADU-000151748
© 2023-2025

The European Commission’s support for the production of this publication (work) does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Commission and National Agency cannot be held responsible for any use which may be made of the information contained therein.

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