The Next Revolution in Retail Banking: Mobile Devices


Mobile Retail Banking

The entire banking industry has undergone and continues to undergo radical changes, driven by technology and the way it fits into our lives. One of the biggest innovation reshaping banking has been the rapid and exponential adoption of mobile banking.

“More than $2 billion in online shopping will be performed by mobile digital assistants.”

According to Gartner, by 2017, U.S. customers’ mobile engagement behavior will drive mobile commerce revenue in the U.S. to 50 percent of the total U.S. digital commerce revenue. Recent surveys revealed that mobile commerce currently generates 22 percent of digital commerce revenue — and rising. This is having a serious impact on numerous industries.
“Some sectors will migrate more quickly than others to accepting mobile payments and promoting mobile commerce,” said Jennifer Polk, research director at Gartner. “For example, big-box retailers may not need to move as quickly as other industries because the in-store experience is still a critical part of their value proposition and the customer experience, making digital and mobile commerce a smaller portion of their overall revenue.”

Changing Standards

Gartner predicts that by the end of 2016, more than $2 billion in online shopping will be performed exclusively by mobile digital assistants. This combined with changing legal standards has retailers adjusting policy.
“New credit card standards will cause a shift in liability for fraudulent transactions in 2015, requiring retailers to update their point-of-sale systems for safer credit card transactions,” said Polk. “This opens the door for point-of-updates to also accept mobile payment.”

Adoption Doesn’t Equal Trust

In spite of continued proliferation, many consumers are weary of mobile baking and payment solutions. A recent survey by MyBankTracker, a personal finance and bank ranking platform, found that only 6 percent of those surveyed admitted to trusting mobile technologies for financial transactions. Other surveys, like the one performed by security software company Arxan, report similarly conflicted feelings about mobile security measures: 86 percent of consumers think their banks are doing enough to protect their apps, yet 41 percent of those same consumers expect those apps will be hacked.
“Consumers and businesses feel it’s the bank’s responsibility to keep them safe,” said Ross Hogan, global head of fraud prevention at the security vendor Kaspersky Lab. “Many of them feel the bank is actively doing something, but just don’t feel ultimately secure. They’re responding out of emotion — ‘I don’t have any information or evidence as to what my bank is doing, but I would hope they are doing something.’ At the same time, they feel vulnerable because they don’t understand what steps the banks are actually taking.”

Changing Consumer Behaviors

While the mobile financial companies are constantly undergoing updates to improve security, changing consumer behaviors also have helped create a “culture” of security. Educating customers on the actionable ways they can create complex passwords, two-step verification and other secure behaviors has led to a boost in confidence and drop in compromised mobile devices.
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