The Bold War

Are you afraid of flying?

Some interesting reports on Mobile banking adoption have surfaced over the last couple of months.  A US study by the Consumer Research Section of the Federal Reserve found that nearly 50 percent of consumers who didn’t use Mobile banking said they were put off by security concerns.

Back across the pond, a recent KPMG study also found that consumers still retained significant fears regarding Mobile banking.  When using a mobile phone, over 60 percent of respondents in the UK held fears that identity or card information could be intercepted by an unauthorised party.

In another survey by security firm Metaforic, 19% of respondents indicated that they had personally suffered a mobile security breach or knew someone who had. 

Look at any global Mobile banking or payments survey and one thing is always clear.  The main barrier to adoption is security.  Well, that’s what we are being told.  But is it really?  Is it the same as asking someone if they are afraid of flying?  Of course they are.  We all are to some degree.  That however doesn’t mean that people don’t fly.  They understand that the benefit outweighs the small risk.  And this is where the answer lies for Mobile banking.  To convert the non-adopters the industry needs to get better at differentiating the service and communicating its benefits.

I have always had doubts that what a bank customer says is what they really mean.  Perhaps my biggest suspicion has always been around the reports that suggest consumers don’t use Mobile banking because of security concerns.  Is this really the case?  Most people in the banking industry would happily concede that Mobile banking apps are far more secure than desktop services.  There has been no negative press and fraud losses attributable to Mobile banking are limited.  So where is this fear coming from?  This is of course the same device that people use to store personal contact details, get text messages and check work emails. 

For me the problem lies more in how the service is communicated.  Whilst the benefits are obvious to users, they are a little bit more difficult to explain to those who don’t.  Consumers are therefore using security as a blanket (pun intended) because they are too ashamed to admit they don’t understand what the service gives them.  And I don’t blame them.  If you look at the feature list of most Mobile banking offerings they mirror the services offered by banks in the branch, on a phone, or online.  Because of this there is even more work required differentiating the proposition and how it’s communicated.  

For a start, banks need to understand the penetration rates for their different consumer segments.  By doing this you can identify the segments you are under-indexed in.  For Mobile banking it is likely to be older age groups.  Understand who they are exactly and what channels they are using today.  Through this lens try you can identify propositions that fill a need for these groups.  Hopefully a proposition compelling enough that they switch.  Consider how you would then communicate the proposition to this segment.  In some cases security will still be top of mind for these groups.  To quell security concerns ensure customers are aware:
• The service is managed by the bank – this makes it trustworthy in the eyes of consumers
• The payment is routed through existing systems – there is nothing different to other transactions
• The mobile phone itself does not make payments or store payments related data
• The bank will take liability for fraudulent payments

With 12 million UK consumers already using Mobile banking, there is already significant momentum behind the service.  There is however still massive opportunity for further growth.  With over 60 percent of UK consumers having a smart phone (36 million), there is still plenty to be done.  If the banking industry can get it right the service can become the de facto standard for banking.  So it is vitally important that banks are able to communicate clearly how secure the channel is and what benefit it has.  We should never forget that for some, it’s a little like taking off for the very first time.


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