The Deloitte Center for Financial Services released a report that indicates eroding consumer confidence in the security of mobile financial service applications has forced the industry to take a closer look at incorporating technologies such as biometrics to help alleviate fears and insecurities. The report seems right on cue following our post last week about the need for the financial services and banking industries to more closely assess the use of biometrics for customer and employee ID and to better secure mobile devices while engaging in transactions.
A link to the full report can be found here and it presents some very interesting statistical data culled from a recent survey Deloitte launched to ask consumers about their comfort level with using mobile banking apps. A few of the highlights:
- Many (banking customers) are hesitant to use mobile services due to concerns over security, privacy, and ease of use.
- Mobile is increasingly becoming the primary method of interaction with their financial services providers.
- Should the at-home mobile experience that financial services companies offer be different from out-of-home experiences, where there is perhaps greater concern about security and privacy?
- (Consumers) placed a much higher value on the ability to interact using mobile devices with their banks than with other financial providers.
- For many consumers, when it comes to conducting financial services over mobile devices, the advantages and conveniences offered by smartphones and tablets are being trumped by more negative considerations about the devices themselves and data security.
- 61% of those who do not regularly use mobile devices for financial services cited security issues as the prime reason.
- 3 in 10 respondents said that security issues had prompted them to severely restrict the use of mobile devices for financial services.
- 72% would appreciate the use of biometric identification in banking (such as fingerprints or eye scans) to enable a device for financial services transactions.
- Biometrics is another mobile device capability that financial services companies could leverage to make customer interactions easier and more secure.
- Nearly 2/3 of smartphone users said they would find it valuable to use biometric identification (fingerprint, voice scan, or iris scan) on mobile devices for ATM transactions and payments.
It is clear that the proliferation of biometric identification capabilities on smart devices has brought the technology more into the mainstream helping consumers to develop a higher comfort level to use it and more importantly, understanding why and how biometrics in banking is a natural evolution of securing online transactions. However, there is still trust to be built in using biometrics in banking on mobile devices to secure transactions. The report states:
“However, the comfort level with biometric security and encryption decreases as the amount of the transaction increases. For instance, the proportion of consumers who are comfortable with this technology drops from 26 percent for a transaction size of $1,000 to only 11 percent for a transaction worth $10,000. This finding illustrates that biometric solutions may be more successful for smaller transactions. As consumers gain experience with biometrics, they might then be more willing to use them for larger payments.”
What’s clear is that not only is biometrics in banking an opportunity for the industry to leverage existing smart device capabilities to boost security, but the use of biometrics is also an opportunity to better engage consumers and build trust – two critical pillars of quality service, customer retention, and spreading positive word of mouth.
Thanks to the staff at the Deloitte Center for Financial Services for their research and reporting. Extremely interesting insight into the rising use of biometrics in banking and an opportunity to truly understand consumer sentiment when it comes to their perceptions of whether mobile banking is appropriate for their use.
Do you feel that biometrics in banking has a place to help increase security and build trust with consumers?