Insight: Will security fears on mobile financial services impact retail?

Insight: Will security fears on mobile financial services impact retail?

Consumers are failing to adopt personal banking apps amid security fears, according to a new study and some retailers are concerned there may be a knock on effect on mobile retailing and mobile payments app uptake.

The study from Kaspersky Lab finds that of those not using mobile banking at all today (36 per cent), more than half of them (74 per cent) 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.

While security concerns are holding back non-mobile banking users from embracing the convenient, digital self-service solutions on the market, those who are active users of mobile banking today also share the same concerns. Of both, users and non-users of mobile banking, 85 per cent said that they would increase their usage to “some extent” if there was more security and nearly half (44 per cent) of those surveyed said that they would “significantly” increase their mobile banking usage with more security.

For financial organizations, an increase in self-service banking usage can drive revenue and reduce transactional costs, but currently customers don’t see a promising future for mobile banking in their lives – with 32 per cent of respondents claiming that they do not ever foresee using mobile as the primary channel that they will engage with their bank or credit union. Banks that do not properly strengthen mobile financial security measures could miss out on a significant business opportunity and risk losing valuable customers in the process.

But retailers too could suffer from this lack of trust and security fears too. A recent study by Episerver found that consumers aged over 55 are the most likely to be concerned by the security of their mobile apps – including retail ones – with 78 per cent ranking security as a top priority. This compares to 60 per cent for 25-34 year olds.

And while retailers and consumers can see the benefits of mobile payment, because of this the financial sector remains the weak link in the chain, often failing to make customers feel safe enough to make the most of mobile commerce.

“In today’s retail environment, mobile shopping has become a key part of the consumer experience, with mobile apps playing an increasingly vital role,” says James Norwood, CMO at Episerver. “Despite this fact however, the adoption of direct mobile payments remains slow, with many consumers still not trusting financial mobile apps to keep their payments secure.”

Skills

Posted on

September 1, 2016

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