Finance Customers Are Worried About Mobile Data Security
US consumers are facing a revolution in the availability of financial services. Traditional banks and insurance companies are facing a wave of innovation from FinTech startups (financial technology) that are building new services with the customer at the heart of their strategy. But despite the focus on service, there is one area where customers are wary – the security of financial transactions when using a mobile device.
Almost 6 in 10 Americans pay their bills online, but around half of these customers are also concerned about security. In addition, 46% feel confused because the mobile environment has created such a wide array of new financial services that they are not sure whom to trust. This new research by Fiserv Inc explores some of these fears around consumers using mobile financial services.
Other interesting findings in the report include:
- 53 percent of consumers say they like to be connected to the Internet at all times; the same percentage say they strongly distrust internet security or privacy.
- Of those who have not used mobile banking in the past 30 days, 57 percent cited security as the main reason.
- At 24 percent, security is of less concern with person-to-person payments, ranked behind preference for other payments methods (44 percent) and unwillingness to pay a fee (38 percent).
- Consumers are most likely to use online bill pay (59 percent) and electronic bills (53 percent), followed by newer services such as mobile bill pay (27 percent), P2P through a bank (17 percent) and digital wallets (15 percent).
- Year-over-year increases were seen in the use of digital wallets (53 percent), mobile bill pay (48 percent), FI-based P2P services (44 percent), and electronic bills (32 percent), while the use of online bill payment and e-bills remained flat.
- 46 percent or survey respondents said they were confused about the various products and services available today; 33 percent said there are mobile banking features they would like to use, but don’t know how.
This data gives an interesting insight into some of the opportunities for existing major brands in the financial service sector. The traditional brands are often presented as lacking in innovation and stuck with high costs and old processes that are not customer-centric. However, they have two major advantages – millions of existing customers and brand recognition in finance.
When one of the biggest consumer fears is this issue of mobile data security, having a solid reputation built over decades (or longer) can be extremely valuable. There is an opportunity for traditional brands to demonstrate that they can deliver a great customer experience combined with the type of data security that customers expect. The brands that understand this blend should really succeed in the modern FinTech environment.
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Photo by Deutsche Bank licensed under Creative Commons.