Over the last year, Android has come to rival the market share of Apple's iOS operating system. But when it comes to offering financial services on mobile phones, banks have favored the iPhone over Android and other smartphone platforms. That's the view of Gartner analyst Avivah Litan, who focuses on financial fraud and authentication at the research firm.
In a recent blog post, she explained that banks prefer the iOS platform as easier to work with. iTunes provides a well-established distribution system; banks don't yet have as much confidence in the security of other platforms, whether Android, Symbian or BlackBerry.
Even the apps that financial institutions are making available to users generally offer limited functionality and don't permit high-risk transactions, such as adding new payees for bill payment or new accounts for fund transfers. She notes that reports of attacks on SMS banking outside the U.S. have surfaced. McAfee says mobile malware threats increased 46% in 2010.
One mobile banking initiative that gained much attention last year was JPMorgan Chase's offering of remote check deposits on iPhones. The feature in Chase Mobile app allowed customers to use their phone cameras to scan a paper check and send to Chase for processing. (USAA Deposit Mobile, another iPhone app, had previously supported mobile deposits.)
Litan points out that the Chase app scans the check rather than taking a picture of it, so it's not stored on the phone. "This makes it similar in security to scanning and depositing checks at the ATM machine," she wrote. Deposits are also limited to $1,000 a day and $3,000 per month.
Chase Mobile is also available for Android phones; the banking giant this month announced a partnership with mobile imaging company Mitek Systems to expand the app to other smartphone platforms. BlackBerry and Microsoft's Windows Phone 7 would seem the most likely candidates for Chase to target. At the end of 2010, iOS, Android and BlackBerry were locked in a virtual three-way tie for U.S. market share, with about 28% each.
While the iPhone may still be the first stop for banks, the continued growth of Android and the leveling of the smartphone field overall will ultimately require them to develop apps for multiple handsets to reach more customers. Wider smartphone adoption and growing mobile Web use will push the U.S. mobile banking population from 10 million today to more than 50 million by 2015, according to a recent Forrester forecast.