Consumers are warming to the idea of using their mobile devices for banking, but concerns about privacy and security are keeping them from completely embracing the idea.
According to KPMG’s fifth annual Consumers and Convergence survey, a third of U.S. consumers have used their mobile device for banking, up from only 19% last year and 9% in 2008. However, most respondents to the survey (57%) said they still prefer to use a computer or bank in a branch. Nearly two-fifths of those respondents (39%) said security and privacy concerns were the obstacles blocking them from picking mobile banking wholeheartedly.
However, people may just be waiting for the killer app to come along and take away their fears, says Mitch Siegel, a principal in KPMG Financial Services practice. For instance, people using Square, a person-to-person credit card application, are so enchanted by the technology that they don’t think about the security concerns, he says.
“I personally don’t think security is as big a roadblock as these surveys say they are,” Siegel tells Marketing Daily. “As soon as the solution is right and the technology is right, those concerns will ease.”
He also notes that many of the banks already have security protocols in place from their Internet banking efforts. Their obstacle, Siegel says, is that they need to communicate these safety measures to consumers to help allay their fears.
“I think there’s some better communications that banks can do with their clients,” Siegel says. “People are fairly comfortable doing simple mobile banking (checking balances, making account transfers, etc.). More of the security concerns come from tying account numbers and card numbers [to] a wireless link and the fears of that data being captured.”
But with the coming era of mobile wallets (using a phone to handle all transactions, in which people expressed interest in this latest survey), the banking industry is likely to see even more competition from a broader array of companies, Siegel says. The biggest danger to banks is they could lose their advantage among consumers. According to the survey, banks are still the most trusted source when it comes to financial data, but secure payment systems, such as PayPal, are gaining ground.
Along those lines, banks need to do a better job communicating not only the security of their mobile banking operations, but also of the services they offer. More than half (54%) of consumers said they didn’t believe or didn’t know if their bank offered mobile banking services.