Mobile banking adoption slows down

With the explosive growth of smartphone ownership,
zooming upwards of 40 percent since 2010, and constant buzz about such hot new
technologies as mobile wallets for payments, financial institutions (FIs)
expected that mobile banking growth would continue to skyrocket as well.

However, mobile banking has actually plateaued.
Tech-savvy consumers are increasing their use of smartphones to do almost
everything these days everything, that is, except mobile banking and
purchasing. Javelin found that the rate of adoption of mobile banking barely
budged between 2010 and 2011, despite FIs’ aggressive promotion, and rates of
mobile purchasing also stayed the same, according to Javelin Strategy &

One reason – smartphone owners perceive mobile banking as
less secure. Between 2009 and 2010 the number of consumers who rated mobile
banking as unsafe” or very unsafe” increased by a shocking 54 percent.

This study is a wake-up call to FIs to look into what
consumers really want. First and foremost, FIs need to address consumers’ needs
around security and communicate to consumers their commitment to creating a
safe and trusted channel for mobile banking,” said Philip Blank, managing
director, Security, Risk and Fraud.

As FIs forge ahead to build mobile relationships with
smartphone users, they must neutralize mobile threats in order to build
consumer confidence.

These consumer responses reflect attitudes before the big
data breaches of 2011, which affected more than 180 million personal records,
and the malware attacks in early March 2011 on Google’s Android Market. These
data breaches make consumers feel even more uneasy about using mobile channels.

FIs need to get ahead of the problem and focus both on
addressing security concerns and responding to consumers’ needs around mobile
banking,” said James Van Dyke, president and founder of Javelin.

Really listen to consumers and give them what they want.
Our report clearly shows how the consumer prefers to do their mobile banking.
That’s where FIs need to concentrate their development efforts to boost
interest in mobile banking and at the same time – respond to consumers’
significantly increased fears,” Dyke added.

By Team
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