August 23, 2016 By Douglas Bonderud 2 min read

Mobile banking apps offer huge potential for financial institutions. As noted by The Wall Street Journal, more than half of all smartphone users already leverage free banking apps. Even if banks started charging for the privilege, most customers would pay between $1 and $3 per month.

According to new research from Kaspersky Lab and IDC, however, many clients are still reluctant to engage with banks and credit unions through mobile apps. Of the 36 percent of users still opting for in-person and telephone banking, 74 percent said security was their most pressing concern. Have banks finally hit maximum return on investment when it comes to mobile?

Kaspersky Lab Sheds Some Light

As noted by IT Pro Portal, even among clients comfortable with completing bank transactions online, there’s a desire for improved security. Among both users and nonusers, 85 percent said they would increase their app usage “to some extent,” while 44 percent said their usage would increase “significantly” if more security was integrated.

Less heartening for the finance industry, however, are the 32 percent of respondents who said they had no plans to use mobile banking services — ever. For credit unions and banks, this is bad news. While customer comfort and ease-of-use remain top mobile app priorities, companies also stand to gain big benefits from the reduction in transactional costs when users choose to leverage smartphones instead of visiting brick-and-mortar branches.

The Wall Street Journal piece noted, for example, that 94 percent of app users check account balances online, while 48 percent deposit checks and almost the same number pay bills online. Without the need for human oversight, all of these services are more cost effective on mobile.

Furthermore, banks have already had some luck charging for premium services, such as fast bill paying or mobile deposits. When it comes to really tapping this burgeoning market, however, there’s a critical question: Is it possible to turn anti-app users into believers?

Mobile Banking Is More Than Just Convenient

According to the Toronto Star, recent data out of Canada suggested that mobile banking users are more satisfied with their financial institutions than those who skip the app. Part of the increase comes from convenience: Customers can easily check balances or perform simple transactions anywhere, anytime.

But increased financial literacy is also crucial. Paul McAdam, senior director of banking services at J.D. Power, told the Toronto Star that clients using the app every day have a better understanding of their balances, specific bank processes and how they can avoid incurring fees.

Double Down on Security

With revenue potential for banks and increased financial freedom for users both bundled up in mobile apps, financial institutions need to double down on security. As noted by Information Security Buzz, this means not only implementing stronger security measures, but also actively promoting them. According to the Kaspersky Lab data, more than 80 percent of users want some evidence that their bank is taking steps to improve the security of their mobile experience.

Some of these steps even seem counterintuitive, such as banks reporting to users that viruses or malware were detected on their device. But instead of driving consumers away, reports of found and neutralized threats serve to reinforce the notion that banks care about the safety of consumer data and are taking proactive steps to limit mobile risk.

Mobile banking app adoption remains slow as users struggle with the specter of financial data compromise. If financial institutions want to onboard naysayers and convince current users to pay additional service fees, security is the solid bet. Actively track threats, report any findings and make sure users know exactly how new apps will protect their assets.

More from

Brands are changing cybersecurity strategies due to AI threats

3 min read -  Over the past 18 months, AI has changed how we do many things in our work and professional lives — from helping us write emails to affecting how we approach cybersecurity. A recent Voice of SecOps 2024 study found that AI was a huge reason for many shifts in cybersecurity over the past 12 months. Interestingly, AI was both the cause of new issues as well as quickly becoming a common solution for those very same challenges.The study was conducted…

39% of MSPs report major setbacks when adapting to advanced security technologies

4 min read - SOPHOS, a leading global provider of managed security solutions, has recently released its annual MSP Perspectives report for 2024. This most recent report provides insights from 350 different managed service providers (MSPs) across the United States, United Kingdom, Germany and Australia on modern cybersecurity tools solutions. It also documents newly discovered risks and challenges in the industry.Among the many findings of this most recent report, one of the most concerning trends is the difficulties MSPs face when adapting their service…

Hackers are increasingly targeting auto dealers

3 min read - Update as of July 11, 2024 In late June, more than 15,000 car dealerships across North America were affected by a cyberattack on CDK Global, which provides software to car dealers. After two cyberattacks over two days, CDK shut down all systems, which caused delays for car buyers and disruptions for the dealerships. Many dealerships went back to manual processes, including handwriting up orders, so that sales could continue at a slower pace. Car buyers who recently bought a car from…

Topic updates

Get email updates and stay ahead of the latest threats to the security landscape, thought leadership and research.
Subscribe today