Mobile banking is ubiquitous. In 2019, 96 percent of financial institutions in the United States said that they offer or planned to offer mobile banking services before long. Their retail banking customers have shown their appreciation, signing up for time-saving convenience and accessibility. Mobile banking adoption doubled in the United States between 2008 and 2010, and then doubled again three years later in 2013. In 2019, it was estimated that more than 75 percent of Americans used mobile banking in some form.
Consumers remain skeptical about mobile security, however, and it has kept a sizeable percentage of them from downloading their banks’ apps or taking advantage of a full range of services. Security concerns have also caused banks themselves to delay offering full financial services through the channel. This is especially true for high-value, high-risk transactions, such as wire transfers, ACH, or stock trading.
For financial institutions to prosper in the digital era, building trust in the mobile channel is imperative, according to a paper by the fintech software company Entersekt, aimed at financial institutions, and titled Securing the Mobile Banking Channel.
Security cannot, however, compromise usability, not without turning customers away. Ease of use, or the lack of it, is another factor hindering adoption, as countless surveys indicate. There has never been a more important time for financial institutions to engineer engaging mobile banking experiences that balance the seemingly opposing goals of heightened security and convenient access. Their customers will reward them, the report suggests.
The firm point to a recent FBI warning that an increase in attacks on banking applications by cybercriminals and fraudsters is likely, as consumers stuck at home during the COVID-19 pandemic rely more on these platforms. The paper details threats; the rise of mobile malware, vulnerabilities stemming from poor app design and configuration, weaknesses in mobile device ID, plus flawed authentication.
Christian Ali, SVP Product at Entersekt, said: “Current solutions to digital fraud have failed to alleviate consumer uneasiness around mobile banking security and have had a negative impact on the user experience. Meanwhile, mobile malware is evolving fast, threatening to make the situation worse. If banks want to protect their customers from account takeover fraud and secure their futures in a disrupted marketplace, they must intelligently re-engineer user and transaction authentication on the mobile channel as the first, crucial step on that path.”
Visit www.entersekt.com.
