No to UK mobile banking until deemed safe?

One of the most fundamental services banks provide is keeping customers' hard earned cash safe. 

With new innovations developing in the market with increasing speed, banks are struggling to keep up. Customers can now carry out banking activities from a variety of sources - branch, telephone, online, mobile - and this opens up security risks which banks must address.

Mobile banking is expected to grow to 1 billion users by 2017 but security remains a top concern for mobile bankers in the UK and this is impacting negatively on adoption rates. Previous research by KPMG found only 27% of people in the UK had used mobile banking in the previous 6 months compared to 52% worldwide. 66% were worried about their credit card information being captured by fraudsters while 62% were concerned that others may be able to access personal details.

Concerns over mobile banking technology have become so significant that regulators are now stepping in to ensure banks have the appropriate IT systems in place and that enough is being done to protect customers from security risks. This in turn should help assure consumers that their details and money are safe from fraud whilst using mobile banking.

This may create grumbles amongst banks though as development may be necessary to their IT infrastructure and further steps may need to be taken to protect customers. However, an infographic by Metaforic highlights improving security measures can increase adoption rates of mobile banking with 54% of non mobile banking users indicating that they would adopt mobile banking if there was evidence of more robust app security and 48% would adopt mobile banking if there were assurances that losses would be covered.

Other concerns raised by the FCA included risk of virus when downloading mobile banking apps and payment errors such as typing in the wrong account details or amount when transferring money to a person or company - this is particularly relevant when people can make payments to other accounts by simply using a telephone number. With screen sizes and keys being smaller, this is a very valid concern as the risk of human error is significant.

The good news is many UK banks are already offering to protect customers in the event of fraud within mobile banking and have additional security steps in place for mobile banking customers. Barclays has services such as secure log-in and Mobile PINsentry to protect the most vulnerable transactions within online banking. Nationwide validate customers during registration and all information is verified though VeriSign, which is a main global player for secure e-commerce.

However, it is not enough that banks have security steps in place. To fully protect customer accounts, it is important that not only banks are protecting customer accounts, but customers themselves are taking responsibility to protect themselves against security risks. Within the Metaforic infographic it was revealed that only 1 in 5 consumers had installed anti-virus software on their device, indicating that more needs to be done by customers themselves.

Many UK banks are now trying to teach customers on what steps can be taken to heighten security measures. For example, Barclays have a dedicated page on mobile banking security highlighting the steps they have taken to protect customers as well as advising customers on actions they can take to strengthen security. This includes an advice section on how customers can help protect their accounts and free security software for PC and mobiles.

Find out more about how customers and banks can improve security for mobile banking or how mobile is making a difference within banking and finance.

For further information regarding HSL Mobile, visit us at:

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Will mobile banking security concerns really hinder adoption?

One of the most newsworthy items surrounding mobile banking is security concerns. But do customers really care? Are security concerns actually making people not use mobile banking?

Let's find out.

Mobile banking is now reaching mainstream in most countries with developing countries seeing some of the best innovations being developed. 

Sales for smartphones also continue to rise creating new mobile banking users in the developing world. We come to expect banks to offer mobile banking services around the globe, and if you don't, you run the risk of turning away customers.

With the rise of mobile banking users, concerns around security are heightening according to a survey by Federal Reserve Board. A list of some of their key security findings are noted below.

• Customers rated security of SMS for mobile banking at 38% in 2011 but this has dropped to 34% in 2012.
• Customers also rated mobile browser security at 42% where a year earlier they rated it at 38%.
• Number of customers rating mobile apps as safe also declined from 40% to 35%.
• More customers are unsure as to whether SMS for mobile banking, mobile browsers and apps are safe or not.
• Mobile phone users who use their mobile for banking are more likely to consider mobile banking safe and are likely to know whether they consider it secure or not.
• Overall mobile banking safety (keeping personal information safe) has not witnessed much change.

These findings indicate that as customers use mobile banking more, security concerns are rising and there is a gap in terms of the knowledge of mobile banking security with many stating they ‘don’t know’ if it is safe or not.

Another survey by Jumio Inc "The 2013 Consumer Insights study" found some very revealing insights into whether customers will actually not use mobile banking due to security concerns.

They found many had been subject to online or mobile fraud (a quarter) and although 83% were concerned with identify theft, they would choose the convenience of mobile banking over security. Customers would continue to use their mobile for carrying out banking activities and expect to use them even more in the future.

However, although security concerns appear to not be hindering mobile banking adoption at the moment, it is important that banks address concerns and educate customers as to how they can protect their details and accounts. This will ensure that mobile banking continues to grow and security concerns do not hinder adoption in the future.

To learn ways you as a customer can enhance mobile banking security, or banks looking at ways to improve safeguards in place for mobile banking, please read Mobile banking - is it a stick up?

Alternatively, please contact us for more information.

For further information regarding HSL Mobile, visit us at:

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Mobile banking for loyal customers

Mobile banking has been as busy as ever with more banks introducing mobile services and extending their offerings as customers become more and more comfortable using these services. Ever thought though, is it worth all this effort?

Well it is. Harris Interactive carried out research for Yodlee Interactive and found that the sheer convenience of banking is the number one reason for staying loyal to a bank in the US. Online and mobile banking are unarguably very convenient as you can carry out many banking activities from anywhere, at any time and customers are quickly recognising these benefits.

The popularity of online and mobile banking is rising and this is leading some banks to rethink their branch strategy and in some cases, reduce the number of branches as more customers rely on online and mobile banking. This does put further pressure on the online and mobile banking experience itself as it becomes a more used channel (and in some cases, the only real channel customers use). With a significant number of mobile banking users in this study highlighting the mobile banking experience as a reason why they stay with their banks, it becomes clear that banks have to deliver an enjoyable and effective mobile banking experience in order to deepen the relationship with customers and ultimately retain them.

Mobile banking is being used for a variety of tasks such as checking balances, setting up fraud alerts and paying bills. American Savings Bank recently launched a new banking service - mobile cheque deposit - where customers take a picture of the cheque to deposit it into their account. This service is gaining popularity in many markets and proved to be much more popular than the bank was ever expecting as it blew their one year target in just one month. This is yet another indicator that customers are becoming much more comfortable with depositing money using a mobile device for its ease of use and convenience. The benefits simply outweigh the concerns.

From a bank's point of view, as well as being a useful way to retain and attract customers, they are also able to cut transaction costs with company Mitek estimating savings to be over a $100 million.

Back in the UK, it is a similar picture with Intelligent Environments finding that more than half of the people in the UK state online banking services as a key motivator in bank loyalty. However, many also noted that they experienced frustrations with online and mobile banking. These reasons range from difficult to use devices to access accounts such as PIN generators to lack of consistency between offline and online services. Considering that studies are showing the importance of online and mobile banking not only in retaining customers but attracting customers, banks need to rectify this ASAP.

Like any business, banks need to focus on the customer and what they want. And banking customers in the UK and around the world are shouting for convenience. Mobile banking delivers this in abundance as customers are given more access and control over the everyday management of their finances which they can access quickly from anywhere at any time. You can connect to your online account at home, at work, in a shop, or on the bus (just to name a few).

To learn more about the different ways mobile can be used in banking, please visit our Solution Planner or simply get in touch. 

For further information regarding HSL, visit us at:

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Mobile banking - is it a stick up?

As mobile banking popularity soars, we see more warnings about the security of mobile banking. However, who is responsible for keeping your details safe - you or your bank?

We think it's both of you. The bank must uphold the highest standard of security and implement the appropriate safeguards to protect customer details. 

Already we see banks implementing a number of safety steps and we have noted a few below.

1. Sending SMS when a new payment recipient has been added to the account.
2. Set up overseas transaction alerts to instantly alert a customer when their card has been used overseas. 
3. Using SMS and voice to verify changes to account. 
4. Set up SMS alerts for weekly balance alerts, credit limit alerts and high and low balance alerts. 

These types of alerts notify customers to whether there has been any unexpected transactions from their account as well as helping customers manage their finances.

There has been some controversy over how secure an SMS is. Like any technology, there are a few weaknesses. However, this is why it is strongly recommended that banks use a number of safeguards rather than relying on only one step to protect details. For example, if a customer is setting up a payment for a new recipient this typically requires UK banking customers to verify through telephone verification as well as sending an SMS to the customer advising that a new payment has been set up on their account.

Customers also need to be responsible when it comes to protecting their own personal details. This includes:

1. Always logging out of the site when you are using mobile banking 
2. Never saving your username 
3. Keeping your password safe 
4. Never sharing any personal or private information with others 
5. Setting up SMS alerts for fraud 
6. Letting the bank know when you are travelling abroad 
7. Always ensuring you are logging in from a secure network

Mobile banking benefits are far reaching for both customers and the bank. Customers are able to bank anywhere at any time allowing them to manage their finances in real time and banks are able to cut down on routine transaction costs as well as deliver improved customer care and service by enabling proactive and real time alerts. However it is important that banks continue to develop safeguards to protect customers’ personal detail and money and customers also understand how they can help protect their accounts.

To find out more about how our mobile banking solutions can help you, please explore our Solution Planner.

For further information regarding HSL, visit us at:

http://www.hslmobile.com

follow us on LinkedIn, Twitter @hslmobile, Facebook or Google+

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Does Mobile Banking Mean the Chop for Branches?

Deloitte estimates that a further 20 million customers will take up banking services and consequently banks will focus on developing mobile banking to compete for new customers. Banks are expected to move away from cost cutting strategies and invest more in IT to capture new customers. 

As banks continue to focus on mobile banking innovations, what does this mean for branches?

There is much debate as to whether mobile banking signals the end for branches. Bain and Company don't think so and I agree. Research by BT Global Services demonstrates that branches remain the most trusted and preferred channel for many as people need a certain amount of human interaction and want to put a face to 'who' has their money. However, as mobile banking continues to develop, adoption rates increase and customers' security concerns diminish, trust levels for mobile banking is likely to rise and this will impact on the banking channels used by customers. Think about it. 'Who' do you want to speak to when you are annoyed or have a question - definitely not a computer!

However, as further mobile banking innovations are introduced, we should expect to see increasingly less reliance on branches. At the moment, many banks are offering basic mobile banking features such as the ability to check account balances and transfer money which helps reduce the number of people visiting branches as they are able to complete basic transactions themselves. However, demand for more advanced technology is growing as customers seek more control over the management of their finances such as imaging for cheque deposits using their smartphone. This means that customers won’t have to visit a branch and wait in line to deposit a cheque – they can do it instantly with the touch of a button! But the fact remains, branches are unlikely to disappear as customers will, at some point, seek face to face interaction.

The role of branches and the functions they carry out on the other hand is very likely to change. Bain and company state banks must change from dealing with costly routine inquiries to high value inquiries. This makes sense as customers are increasingly able to carry out routine activities themselves and this will allow banks to reduce costs. In order for branches to remain relevant, useful and achieve optimal productivity as channels such as mobile banking continue to seek dominance, banks must review the role branches perform.

Celent research looked at different ways banks are changing their branches in light of recent technology changes such as mobile banking. Banks are increasingly empowering customers to use technology to assist with services rather than requiring them to go to a branch. One bank mentioned that customers are able to open a credit card from their mobile or book an appointment with a member of staff at a branch using their mobile. One of the key themes was to view each channel as a host of ways to reach customers and ensure consistency across all. This allows customers to contact a bank using a contact channel that suits them, and allows branches to become more focused on helping deal with more complicated inquiries, offer information and focus more on a sales approach.

Banks are increasingly reviewing their infrastructure and rethinking the purpose and role of branches. SunTrust Bank in the US is closing a number of branches after customers began using other channels such as mobile and online banking, helping them cut costs significantly. CEO and Chairman William Henry Rogers also agrees that branches still have an important role to play and will not disappear, stating,  “They’re still where most new products are sold and where clients typically go to resolve a problem. So while the role of the branch may be changing, they remain a key sales and service distribution channel.”

To find out more about how mobile banking can help your financial firm reap benefits such as reduced costs, higher customer loyalty and new customers (to name a few) please visit our Solution Planner

For further information regarding HSL, visit us at:

http://www.hslmobile.com 

follow us on LinkedIn, Twitter @hslmobile or Google+

or call us on +44 (0)1506 605260

or email us at sales@haysystems.com

 

Everything you wanted to know about a Mobile Banking Strategy but were afraid to ask

Mobile banking is no longer a new concept as it fast becomes common place in many markets. This is transforming the way in which banks reach and sell to customers and is creating substantial potential for banks to increase customer loyalty and revenue as well as attract new customers and strengthen existing client relationships. But only if it's done correctly and more often than not - it's not.

 

It is no longer enough to simply develop mobile banking features. Banks must take into account the differences between their mobile banking customers and tailor mobile strategies to specific segments of mobile customers. This will greatly increase the likelihood that goals will be achieved such as increased loyalty and revenue. Mobile banking in the UK: Sizing the Market Opportunity recommend a series of different strategies for various segments which they have identified. For example, they classified one segment of customers as ‘Innovators’. These customers use mobile banking on a daily basis and are happy to pay for services which makes them a profitable segment. However, loyalty amongst this segment is low and demands are high. As a result, this report recommends that banks advocate the “time-saving qualities of mobile, allowing loan and overdraft arrangement via this channel, and allow full customization of mobile services.” They believe this strategy will help banks reach full potential for this segment. B minus - less talking more action please!

They also classified another segment of customers as ‘Mainstreamers’. These individuals aren’t yet using mobile banking services but are set to use them soon. This segment is focused very much on simple and easy to use features. However, they are likely to use multiple providers for all their product requirements. This report recommends banks advocate ‘integrated management of all holdings’ to help ensure they are the only provider for customers banking needs.

Bain and Company recommend that banks segment customers by wealth. They found that mobile banking in the US was used more as customer incomes increased but at the same time, they were also found to be one of the least loyal segments as they expect more and are not easily impressed with functions. This means that banks cannot expect mobile banking to simply increase loyalty for all customers, they must go beyond this. C minus - could do more!

Bain and Company also state banks should focus on the more affluent customers as they are the most profitable segment. The reason for this is that once they are happy with services offered by the bank, they are more likely to promote the bank to their affluent friends and family and take on further products. In order to keep this segment happy, Bain and Company recommend services are tailored to the individual, expert advice is given and personal banking relationships are developed in order to turn wealthy mobile banking customers into promoters of the bank.

There are multiple ways to dice customer data, but as long as banks develop clear segments and tailor their services accordingly, they are more likely to enhance customer loyalty, increase revenues substantially and attract new customers in an extremely competitive market. Read our UK Banks catching up with Mobile Banking blog for some ideas on future mobile banking innovations.

For further information regarding HSL, visit us at:

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Banks Struggle to Cut the Mustard and Customers Jump Ship

Mobile banking is becoming the new norm in society as customers continue to embrace it as they recognise the convenience and simplicity involved. Mobile banking offers a multitude of benefits for banks - increased loyalty, reduced overheads and increased revenue to name just a few. However, realising 'what's in it for me' for the customer is a different story. 

Customers are increasingly searching for more sophisticated mobile banking functions with user simplicity and accessibility that are not readily available in the market and some are frankly not cutting the mustard.

A new study by Varolii shows that only slightly more than half of those surveyed were able to carry out more sophisticated banking functions via their banking app such as proactive account alerts and cheque deposits. However, customers continue to seek more proactive alerts to help them manage their money as the cost of living increases and the amount of disposable cash diminishes. With only just over half of banks already offering these features, others run the risk that their customers will jump ship.

Almost 2 in 3 customers believe banks are responsible for alerting them instantly when funds are low and there is not enough money to pay bills and this figure is much higher in 'younger' consumers. Many also feel a banking app could have helped them manage their finances better to avoid financial problems and that banks are profiteering through not offering a proactive service.  The big risk banks have here is that by not developing these features, customers will become dissatisfied and increasingly irate with the bank, with the possibility that they leave and go elsewhere or take their money out of banks altogether.

With account security being a number one concern, banks should be doing everything possible to safeguard accounts. Customers highlighted the number one feature they want from their banking app is to be instantly notified if there is any irregular activity suspected as they seek more control over managing the safety of their account. However, 81% are not receiving any such notifications. This does not help customers feel valued by their bank and has a negative effect on loyalty yet again.

The quality of banking apps is no longer 'a nice to have' but crucial as Varolii also reveals that apps which customers don’t find useful are likely to be deleted. Considering reports that the quality of mobile banking can be a key deciding factor on whether or not new customers join your bank, it is extremely important that banks focus on what customers are looking for and develop solutions which suit their needs to give them more valuable features.

Going forward, banks must develop more innovative mobile banking features or run the risk of losing customers. Find out how UK banks are beginning to catch up with innovations taking place in the market by visiting our HSL Blog.

For further information regarding HSL, visit us at:

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UK Banks catching up with Mobile Banking

Banking customers in the UK will be able to send and receive money by sharing just their phone number shortly. The Payments Council has signed up 8 financial firms - which hold 90% of current accounts - and is set to launch this service by early 2014. 


So far Barclays, Cumberland Building Society, Danske Bank, HSBC, Lloyds Banking Group, Metro Bank, Royal Bank of Scotland and Santander have become involved but the Payments Council has reported that they are in talks to encourage more financial institutions to take part.

The Payments Council has stated this will be a step in helping the UK banks catch up with the innovations that have already taken place overseas.  Adrian Kamellard, Chief Executive of the Payments Council, said: “This new service will offer a simple, secure way to split a bill for dinner, receive money from a friend or pay a tradesman without needing to remember or share account details.”

A number of UK banks have begun offering mobile banking services such as Barclays Pingit service which allows customers to make minor payments using their mobiles, whilst RBS & NatWest enable customers to withdraw up to £100 from an ATM using just a pin code sent to their mobile phone. However, compared to other countries such as the US and Asia these developments are relatively small and cautious.

According to an article in Telecoms.com expectation in the industry is that mobile banking will grow to 1 billion by 2017 with Nitin Bhas, senior analyst at Juniper Research, stating it is increasingly being viewed as a vital revenue source. Banks cannot afford to lose out on the massive opportunities that mobile banking can offer, particularly as consumers want more innovative services from their banks.

Some banks are beginning to look beyond the traditional mobile banking offering already by offering housing and mortgage apps. Halifax, as reported in The Financial Brand, estimated that buyers will use their smartphones three times more than they are at the moment to purchase their next property over the next 5 years. Estate agents are therefore quickly realising the benefits of mobile technology and are building apps to catch new customers, improve their brand image and increase loyalty.

What else can mobile banking do to help banks? In an article in the Telegraph it was reported that more than half of people residing in the UK state online banking services as pinnacle to bank loyalty particularly in light of the new reforms surrounding account switching. They also reported that although 81% of people use online banking and 20% use mobile banking once a month or more, only 45% will visit their nearest branch once a month or more.

Another survey by Bain & Company found mobile banking was more likely to increase a customer's likelihood to recommend his or her bank to other people than any other channel interaction.

The ath Power 2012 Mobile Banking study also conclude that mobile customers are more loyal and that the quality of a mobile service plays a key role in who they bank with for affluent customers and small business owners. They also state that the mobile channel will be important in fraud prevention as more people begin to use mobile services and become familiar with security alerts.

This year and beyond we expect to see further innovations in mobile banking across the UK as banks recognise the benefits of mobile banking for both their customers and the bank. We are already working with our clients to get ahead of the game but to find out a little more about how your customers can start their mobile banking journey, please read our case studies

For further information regarding HSL, visit us at:

http://www.hslmobile.com    

 

follow us on LinkedIn, Twitter @hslmobile or Google+   

 

or call us on +44 (0)1506 605260

or email us at sales@haysystems.com

Banks embrace SMS to improve security

Every individual wants to know their bank accounts are safe but unfortunately this is not always the case. Recently, it was reported that as a result of human error, banking information along with the personal details of councillors from a UK city was accidently released to a member of the public. Maybe even more concerning is the recent estimate from the National Fraud Authority’s third Annual Fraud Indicator (AFI) that the cost of fraud in the UK has now risen to a massive £73 billion a year from last year’s estimate of £38 billion. Clearly security breaches still take place within banking institutions and this is particularly concerning considering fraud is on the rise. It is therefore even more critical that banks and finance companies make security and fraud prevention a number one priority.

SMS alerts can provide a reliable tool for banking firms to tackle these issues. With almost everyone in the UK having a mobile phone, and most messages estimated to be read within a matter of minutes, SMS communications allow banking institutions to reach customers anywhere and at any time. As a result, accounts can be monitored in real time to avert security breaches from taking place and quickly resolving any issues when they do arise. For example, banks can use SMS to send customers secure passwords when they set up a new direct debit via their online banking facility. In order to complete the process, customers are required to enter the password online, helping prevent fraud from occurring in the first place. Customers can then also flag up any changes attempted to their account without their knowledge.

As a result, SMS security alerts can also improve customer satisfaction. Customers are instantly aware of any security concerns and with additional safety steps in place, they can rest assured that their information is being safeguarded. Furthermore, by allowing customers to set up their own security alerts such as sending a notification when their cards are used for overseas transactions, they can control the nature and regularity of when information is received leading to greater overall customer satisfaction.

Additionally, banking SMS alerts have also been found to enhance customer loyalty and attract new customers which is crucial considering the competitiveness of the banking market today. The ath Power 2012 Mobile Banking study found that only about 1 in 8 mobile banking customers stated they would switch banks within 2 years compared to 1 in 5 within the general customer group. Furthermore, the quality of mobile banking was a key consideration for the most affluent and small business owners when deciding which bank to select.

It is therefore not surprising that banking institutions are rapidly embracing SMS to protect customers' details and accounts against security risks. We would expect security to remain a number one priority for banks, and with additional benefits such as greater customer satisfaction and loyalty, banks have even more incentive to continue adopting SMS.

At HSL, we have been providing high quality and reliable SMS services since 1999 and banking and finance is one of the many sectors which we serve. For further information on how HSL’s mobile messaging services can help you, please visit our website at http://www.hslsms.com/sectors/banking-and-finance/.

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