The Gers were expected by many to pick up all three points from the Scottish Championship encounter against Falkirk at the Falkirk Stadium last Friday evening.
Mark Warburton’s side took the lead as early as the seventh minute when Kenny Miller found the target.
Rangers went 2-0 up just two minutes later through Barrie McKay, and it appeared that they were going to score two or three more.
However, the Glasgow giants collapsed in the final 20 minutes of the game to lose 3-2, as Blair Alston, Myles Hippolyte and Bob McHugh found the target for hosts Falkirk.
Left-back Wallace has suggested that Rangers suffered a late collapse due to complacency.
"It was possibly complacency,” the 28-year-old told The Glasgow Evening Times. “We were sitting at half-time speaking about how we should be three or four up.
"The message to us has to be start the second half at the same tempo as we started the first half.
"We had to go out and get the third, fourth and fifth goals that we spoke of. That didn’t happen for one reason or another and it was really disappointing.”
Speaking about the mood inside the dressing room after the shock defeat, Wallace said: "There certainly should be anger in the dressing room. We are disappointed. It was a hurt dressing room. It is certainly not like us.”
Rangers are at the top of the Scottish Championship table at the moment with 72 points from 29 matches. The Glasgow giants are 11 points clear of second-placed Falkirk and have a game in hand.