A new report by Javelin Strategy and Research indicates that, while popular overseas, less than 10% of US consumers use a mobile banking product, most over fears of a lack of security. The report entitle “2008 Mobile Banking Security Standards” found that 47% of those who did not sign up for a mobile banking product stated it was because of concerns of security, while 73% feared that hackers could access their mobile phones. Others worried that their transactions could be detected by others monitoring wireless communications (despite encryption), and others worried about what would happen if their phone were stolen.
The report suggested that, to assuage fears of consumers, banks should move beyond the standard user name and password, offer email alerts to consumers for significant transactions, and provide reimbursement guarantees in cases of fraud.
Both Visa and Mastercard are looking at the mobile space; Visa recently released an Android application that connects users to their accounts. Resolving trust issues with consumers is essential in solidifying adoption.