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US m-banking take-up hindered by security and cost concerns - survey

08 April 2009  |  9400 views  |  1 D600 mobile

Just nine per cent of Americans have used their mobile phones for banking with cost and security concerns presenting major obstacles to adoption, according to a survey from KPMG.

The poll of over 500 people shows 85% of respondents believe mobile banking is important but they do not want to pay for it. Of those who have not used m-banking, 48% cite security and privacy as the primary reason.

The survey also highlights a lack of awareness on mobile banking, with 68% claiming their financial institution does not offer the service.

However, despite the pricing and security concerns, 19% say they are at least "somewhat likely" to use their mobile device for online banking in the next 12 months, with seven per cent even willing to pay a nominal fee.

The survey also reveals concerns over mobile payments, with 66% of respondents saying they are not comfortable using their handsets for financial transactions.

A massive 95% say they have never made a purchase from a vending machine using their mobile device. The same percentage say they've never made a purchase through a retailer's mobile Web site.

However, Mitch Siegel, director of payment advisory services, financial services practice, KPMG, says mobile banking and payments could yet take off.

"With high mobile device penetration rates, US consumers are accustomed to using the mobile channel to access data. And it may only be a matter of time before they grow comfortable with using - and potentially paying a premium to use - the mobile device for browser-based and point-of-sale, 'contactless' financial transactions," says Siegel.

The survey contrasts with a poll released by vendor Fiserv in September which found that around three quarters of US customers would consider using mobile banking services if offered.

Comments: (1)

A Finextra member
A Finextra member 11 April, 2009, 07:27

It is fairly obvious that customers don't want to pay for a mobile banking service, and that includes paying for a premium data service on their mobile in order to be able to perform what is generally and accurately perceived as unsafe.

This means no gadgets they have to buy, and that providers have to come up with something much better than what is currently offered in terms of security.

I believe the churn in online banking customers is primarily because of security/privacy concerns although numbers have been boosted through consumers wanting to avoid the costs of going to a bank branch in recession.

I would be unsurprised to see a strong drop off in internet banking and transactions in general in the coming months, certainly at least by the customers who count.

Current approaches are not satisfying the consumer's concerns about privacy and security and free isn't cheap enough for poorly designed products.

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