Security concerns restrain mobile banking

BY Matt Atkins

Consumer fears surrounding security have dampened interest in the mobile technology services of financial institutions worldwide. These are the findings of Deloitte's new report, Mobile Financial Services: Raising the Bar on Customer Engagement, based on survey data from Andrews Research Associates.

Though financial services companies are largely eager to enter the mobile transaction market, the industry still has work to do before it captures the full potential of today's technology, finds the report.

Of those respondents who do not regularly use mobile devices for financial services, sixty-one percent cited security issues as the prime reason. Over one-third of those surveyed were most insecure about using financial services on mobile devices due to lack of trust in the security of the Wi-Fi and mobile networks transmitting their data. Twenty-eight percent were worried about their mobile device being lost or stolen. One in five respondents believed that the risk of identity theft was greater with mobile transactions.

To address security concerns, respondents supported measures to create more secure Wi-Fi or mobile networks, systems that automatically disable stolen mobile devices, and the adoption of more secure mobile identification methods such as biometric technology.

The survey did indicate that mobile products have been more widely adopted in the banking sector than in other financial service sectors, such as insurance. However, it still finds that banks "are at a decided disadvantage compared to other sectors" when it comes to security.

“The financial services industry is entering a new phase in its digital evolution, with mobile technology reshaping customer engagement in a dramatic manner, and increasingly becoming the primary method of a consumer's interaction with their financial services providers," said Jim Eckenrode, executive director of the Deloitte Center for Financial Services. "To boost adoption and set the stage for more ambitious applications, companies will likely have to take tangible steps to reassure consumers about the security of their mobile financial transactions."

Report: Mobile Financial Services: Raising the Bar on Customer Engagement

©2001-2016 Financier Worldwide Ltd. All rights reserved.