Security Stymies Mobile Banking

By Mark Brousseau

Security fears are the single biggest factor inhibiting mass consumer uptake of mobile banking, Tom Wills, senior analyst, Security, Fraud and Compliance at Javelin Strategy & Research, said yesterday at the Third Annual Mobile Commerce Summit at The M Resort in Las Vegas.

When it comes to mobile banking, 47 percent of consumers surveyed by Javelin Strategy & Research cited security as the thing they are most concerned about, Wills said. “No other category comes close.” Additionally, 73 percent of consumers are concerned that hackers will get access to their mobile phone.

But many consumer fears about mobile banking security are misplaced, Wills said. “There is lots of misinformation and misperception,” he told the audience of 98. “For instance, there is a perception that there is a lot of malware in the mobile banking channel. That’s not true. But it doesn’t matter that a consumer is wrong; if they are concerned, it’s lost revenue for banks.”

Wills added that, “The mobile channel is one of the safest around, if good security is implemented. It has some innate security safeguards.”

Those comments notwithstanding, banks need to be prepared to deal with fraud in mobile banking, Clint Heyworth, attorney, Consumer Finance Group, Chambliss, Bahner & Stophel told attendees.

“Mobile payments are going to happen. That is a given,” Heyworth said. “Fraud is also going to happen. That also is a given. Stealing is not a new concept. Mobile banking is just a new forum for theft and fraud. Companies need to decide how to stop it.”

So, why haven’t we heard more about instances of mobile banking fraud? “Not enough people are using it, and there isn’t enough money going through it,” Eric Kraar, senior architect, Firethorn, told attendees.

Kraar noted that the myriad operating systems in mobile banking strengthens security for the channel because it “makes it harder to get at a lot of people with one attack.” Conversely, it also means that vendors can’t focus their security efforts in any one area. “We can’t come up with one solution that fits everything,” Kraar said.

What do you think? Post your comments below.