Deloitte Says Security Concerns Are Hindering Adoption of Mobile Banking

A brand new report from the Deloitte Center for Financial Services presents evidence that persistent fears regarding security are keeping customers away from mobile banking options. The report is based on a January 2014 survey conducted by Andrews Research Associates on the Center’s behalf and involved 2,193 respondents.

Of the people surveyed that choose not to bank via mobile device, sixty percent cited security concerns as the reason. This statistic is further clarified, with over a third of all correspondents stating that a distrust of WiFi and mobile network security is their number one deterrent, while 28 percent are most afraid of a mobile device becoming physically compromised by theft or misplacement.

“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,” says Jim Eckenrode, executive director of the Deloitte Center for Financial Services. “There are tremendous opportunities for innovation within financial services still, whether in video, biometrics and GPS. The industry – which has already spilled a lot of blood, sweat and tears in this area – has merely scratched the surface in using mobile technologies to connect and strengthen relationships with customers.”

He continues: “And the biggest area of opportunity seems to be in the security area, rather than a certain mobile app or a new shiny feature. 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.”

Two findings that will be of specific interest to Mobile ID World readers are the major discomfort expressed with the smartphone interface and the large support for biometrics in this area.

Half of the correspondents identified the frustration of having to use a smartphone’s virtual keyboard as a deterrent. It’s no surprise that this is the case, but it does demonstrate a strong demand for convenient user experience. This factor is essential in the development of mCommerce platforms: that they live up to the mobile promise and present a viable alternative to regular in person or online banking.

Over half of the survey subjects stated that biometrics would be a comfortable solution to this oin terms of both mobile and ATM transactions.

“In the not-too-distant future, new technologies will likely be added to the mobile platform that take advantage of its ability to know where it is, see what is around it, communicate with other local devices, and connect with information sources that have yet to be deployed,” says Robert Berini, one of the report’s co-authors.  “Leaders should be planning to rethink how mobile device technologies may develop and be ready to quickly adjust to the emergence of technological enhancements that may not be currently envisioned. Ultimately, it may require companies — and all of us along with them — to re-imagine what mobility means.”

The report titled “Mobile Financial Services: Raising the Bar on Customer Engagement” is available on the Deloitte website. To learn more about the “Mobile PRomise” be sure to check out this week’s mCommerce Month feature article on the importance of customer convenience.