Research Finds Security Risks Prevent Consumers From “Buying” Into Mobile Banking

According to a recent report, banking customers are hesitant to use mobile features due to fraud and security concerns. The findings showed that of those not using mobile banking at all today (36 percent), more than half of them (74 percent) cited security as the major reason, which could slow the overall adoption of mobile banking services during a time where mobile device usage is exploding. Ryan Wilk, director at NuData Security commented below.

Ryan Wilk, Director at NuData Security:

“We’re not at all surprised to see this reluctance on the part of consumers to adopt mobile banking wholeheartedly. It’s entirely understandable given the onslaught of daily stories about breaches, and the growing awareness about the security vulnerabilities of many mobile apps.

Consumers are gradually being schooled in online security, even if it is by getting their hands burned first. According to the new ACI 2016 Fraud Report, almost one in three UK consumers (29%) has been a victim of card fraud in the last five years, with much of that fraud perpetrated by fraudsters who made online purchases using hacked or stolen card details. Just as chilling, is the figure that a full 17% have been victimised multiple times.

Perhaps customers are learning from these negative experiences, or it might be a trust issue. They likely fear that banks really don’t have control of their mobile security, or a combination of both.

What’s concerning to us is the finding that 44% of those surveyed would significantly increase their mobile banking usage with more security. In general, we’d be in favour, provided this security is actual security and not just more “security theatre” as we’ve seen time and time again. By this, we mean that adding more single-modal endpoint security layers are likely to just add more and more friction into the process and have marginal fraud prevention impacts.

Instead of layering on more solutions that will continue to provide limited data, FI’s can see this study as an opportunity. It’s clear that customers actually want real security. This means looking at the entire lifecycle of the account and continuously identifying patterns of behaviour that indicate fraud. Understanding how good customers behave will enable them to address these customer fears and concerns.

The good news is that these solutions are readily available on the market and are positioned to help banks provide winning customer experiences, improve their rates of false declines and lower account-based fraud.”