Last updated: 20 March 2014
Smartphones are becoming more and more pervasive in our lives these days, as recent research from Nielsen and Javelin Strategy Research shows.
Consumers are embracing smartphones in record numbers, however the uptake of mobile banking technologies does not match this high rate of adoption.
Increasingly advanced mobile devices are driving growth of mobile banking technologies, which let you check balances, transfer money or even use contactless payment (NFC) to pay for items by tapping your mobile on a payment terminal. However, more than half (54 per cent) of consumers surveyed rated mobile banking as ‘unsafe’ or ‘very unsafe’, which doesn’t chime with the otherwise meteoric rise of smartphones and apps.
This level of trust suggests that the industry needs to do more to reassure customers that making payments on your mobile is potentially even safer and more secure than making payments online.
Recent predictions from Gartner claim that the mobile payments industry will grow in the next couple of years, but hint at slower adoption rates than expected. Sandy Shen from Gartner says that changing user behavior is key to guaranteeing uptake of mobile banking services. As reported by @LeenaRao at Techcrunch.com, there are many players in the mobile payments industry, and they all still have some way to go to convince consumers to start using their smartphone as a financial tool as well as for planning, gaming, entertainment and other uses.
The fact of the matter is, across the industry, more effort has gone into securing mobile banking and mobile payments than many other services consumers happily pour their details into on their smartphones. Between two-factor authentication and a rigorous registration process in use by most major banks and payment services, it’s potentially harder for someone to defraud your smartphone payments than they could a credit card – especially if you live in a country where EMV / chip & payments are not prevalent, like the USA.
How then, can we shift this perception? We think banks are in the best position to help convince customers that mobile banking is secure, to drive further adoption of mobile banking and payment opportunities. They have the marketing clout, the customer relationships and the secure technology at their fingertips to build trust in mobile banking payment services. It’s in their interest – clearly consumers are finding more and more ways to use their smartphones for all things and every customer diverted away from a call centre or a branch will save the bank money in management costs. To get them there, it’s all about communicating the security innovation that is taking place to keep their information safe.
What else do you think needs to be done to help drive acceptance of mobile finance? Let us know in the comments.