Sometimes, opportunity comes knocking at your door without you even asking for it. And this is one of those times.
A recent study by Fiserv shows banks can boost per-user revenue by 72%. No, they don’t need to invent breakthrough products, invest till they go bankrupt, or engage in fishy practices. Instead, all they need to do is encourage their clients to embrace mobile banking.
According to the study, the average mobile user holds 2.3 products from their primary financial institution, while the average branch-only user only holds 1.3 products.
But that’s not all. A user who engages in mobile banking will also perform more transactions – including debit and credit card payments, ATM transactions, and ACH transactions – making the bank’s revenues soar as the interchange fees and other similar interactions pile on.
The result? Bankers smile as they see average revenues from their mobile users increase by 72%.
One might be tempted to say: “Go for it!” With such a huge opportunity to increase revenues, don’t think – just do it!
However, a certain amount of caution is necessary. While mobile banking comes with large payoffs, it also has one significant drawback: security risks.
As mobile banking has become more widespread, attacks have also progressed and are now carried out by organized criminals. In 2014, 29% of phishing attacks targeted users’ financial data. In June 2015, Europol busted a gang of 49 Man-in-the-Middle attackers, uncovering fraud for €6 million. And from September to November 2015, 50 smartphone users in Singapore were hit by malware targeting mobile banking users, for individual losses reaching several thousands of dollars.
Banks need to protect themselves – not only to avoid the costs associated with fraud but, more importantly, to protect their reputation. Customers’ trust is among a bank’s greatest assets.
So what should they do? Is mobile banking worth the risks?
Absolutely – if banks take the necessary precautions to protect themselves and their customers. They must see security as an integral part of their mobile strategy, not just as an add-on. It is this security that will enable a whole new world of services for their customers, and of new revenue streams for banks.
Do you agree? Let us know by tweeting to us @Gemalto, or leave a comment in the section below.