Mobile banking seen as future of industry, but hurdles remain

In general, consumers are believed to be somewhat accepting of mobile banking technologies, but experts have also noted that there are a number of obstacles most financial institutions will need to clear to push toward broader acceptance of the platforms.

Consumers have been eager to take to new banking technologies in the past, but only after certain concerns they may have about these new account management platforms are addressed and assuaged by financial institutions, according to a report from the Mercator Advisory Group. For instance, online banking was once viewed in much the same way as mobile currently is by consumers (that it may be unsafe, and so forth) but now is widely used by the majority of financial institutions’ customers.

And for this reason, most experts agree that consumers will slowly begin to adopt mobile banking as a viable account management option over the next few years until it becomes ubiquitous, the report said. What effect this might have on current banking methods, such as visiting a branch or managing accounts online, is currently unclear, but studies have shown that consumers who adopt mobile options generally prefer them to others.

Current mobile device users more cautious

Mobile banking has generally been accepted as a convenient account management tool by some consumers, mostly the affluent and younger demographics, but others seem poised to adopt as well, the report said. But curiously, it was the owners of smartphones and tablet PCs that were more likely to be concerned over the security of such a system.

In all, 55 percent of these device owners said they were worried about the security of mobile banking, compared with just 44 percent of total respondents last year, the report said. Both those figures were increases from 2010, when 48 percent of tablet and smartphone owners expressed similar concerns, compared with 36 percent of those polled overall.

Barriers to Mobile Banking Industry

“Two key barriers to mobile banking momentum are familiar to bankers: security fears and inertia,” said Ken Paterson, vice president for research operations at Mercator Advisory Group and the author of the report. “But customers will clearly continue to jump in to mobile banking, and the survey data suggests that those who do adopt mobile banking are likely to change their use of other channels.”

Other studies have shown that the ways in which banks can reduce consumers’ concerns over the safety of their mobile banking services are limited, as most will need to come to this decision on their own over time. Usually, within the first 18 months after a bank launches a mobile platform, about 20 percent of its customers will adopt and use it regularly, but after that, there is a bit of a plateau. Consequently, striking the balance with a demonstrably secure and enticing system that’s easy to use for beginners and intuitive for regular should be the goal of all financial institutions developing a mobile banking program.

Posted in Finance
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