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Study Finds That Consumers Fear Mobile Banking Security Threats

While many companies and web sites are rushing to implement mobile applications, I think that it is important to look at the facts. According to The Paypers, a news organization that covers the global payments industry:

"A recent study seeking to assess the main obstacles to mobile banking adoption indicates that [U.S.] consumers regard security as the main concern which prevents them from engaging in mobile transactions.... Another widespread opinion among consumers who chose not to sign up for mobile banking is the fact that since mobile transactions are not yet mainstream, mobile banking services providers cannot anticipate the type of attacks fraudsters could launch against users once mobile banking adoption rates climb."

Sounds to me like consumers are using a healthy dose of skepticism, similar to choosing not to buy the first year of a new auto model. Past experience and product recalls has proven to consumers that it takes time for auto manufacturers to get the bugs out of a new cars. It seems that consumers have judged that the same applies to banks and financial institutions.

This skepticism seems logical to me also because consumers have already experienced numerous phishing attacks via e-mail on desktop and laptop computers. Plus, consumers are wary given the financial and mortgage mess on Wall Street, and data breaches at leading banks, including TD Ameritrade, Bank of America, and Bank of New York Mellon). Mobile banking executives should tattoo on their foreheads: trust is earned, not automatic.

So, consumers choose to wait for banks to straighten out the data security issues first, then sign up for mobile banking. The article also reported:

"Thus, 73 percent of consumers fear hackers can remotely access their phones, 68 percent of interviewees are concerned sensitive mobile banking data can be stolen using a wireless signal despite encryption, and 54 percent of consumers worry that their mobile phones can be stolen. The same study points out that all the major US mobile banking platform vendors offer authentication tools which comply with the standards set out by the Federal Financial Institutions Examination Council (FFIEC), however 56 percent of them have not implemented strong authentication systems for their mobile banking platforms."

Javelin Strategy & Research, a financial services market research company, conducted the study.


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It's because there are still smart people out there which are able to hack other poor bank security.

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