Security concerns are holding consumers back from using mobile banking services, according to a new report. Of the 36 per cent of people who do not use mobile banking today, 74 per cent say security is the major reason why they are yet to adopt the technology.

The survey by Kaspersky Lab and IDC Financial Insights, which questioned consumers in the US and the UK, also found that 85 per cent of both users and non-users would increase their usage to some extent if providers built in more security measures.

Meanwhile, 44 per cent of consumers said additional security measures would convince them to increase their mobile banking usage significantly.

They also want a more proactive approach, with 80 per cent saying they would like to see evidence of security measures being activated when they launch a mobile banking app.

“Consumers are concerned about security on their mobile devices, which has limited adoption of high-margin mobile banking and payment activities including account opening, payments and transfers using a mobile phone,” said Marc DeCastro, research director at IDC.

“As the next generation of online, mobile-first and mobile-only customers begin to explore digital banking choices, financial institutions that have and promote stronger security will attract and retain these customers more easily than those who do not.”

Ross Hogan, Kaspersky Lab’s global head of fraud prevention, said: “As financial organisations continue to expand their self-service offerings to drive revenue and increase customer convenience, it’s important to proactively approach security technology for consumers’ mobile devices in the same way banks approach security for their own PC-based solutions, web offerings and technology networks.

“Recently, we’ve seen an increase in the number of leading financial organisations in the industry that have been fined or penalised for not meeting fraud and compliance regulations. In April, the Federal Financial Institutions Examination Council (FFIEC) released an update to the Examiner’s Handbook outlining risk management expectations for banks offering mobile financial services. Violations of these new mobile security standards have the potential to damage the reputation of banks and may raise the security concerns of customers to an even higher level than they are today.”

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