September 22, 2017
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Posted May 12, 2017
In its ongoing efforts to meet the demands of today’s digital customer, the banking industry continues to create and enable new mobile apps. However, banks and their developers quickly realized that the traditional tensions present in all online banking interactions — security vs. customer friction — are alive and well in the mobile realm.
New mobile banking apps must provide an intuitive, quick and frictionless banking experience while also protecting the customers and the banks from the always-present fraudsters and their schemes. Failure to do so will relegate the app to DOA status.
Obviously, mobile banking apps have evolved tremendously in recent years. The first mobile banking apps had limited functionality, partially because the technology hadn’t evolved, but also because nobody really had a clear read on the risks associated with mobile. The pioneering app teams that developed the first generation of mobile bank apps recognized immediately that you couldn’t just extend a customer’s threat profile from the desktop to mobile.
Equally eye opening was the fact that customers needed more than an online bank statement…merely being able to check your account balances wasn’t enough. The new digital banking consumer, who grew up immersed in technology, wanted to do as much of their banking business online as possible. As digital natives, they were not afraid to conduct banking via a mobile device. In fact, this behavior seemed perfectly normal, given that they could do just about everything else on their mobile devices.
Accordingly, the adoption of these apps was explosive. Today, some banks tout online mobile traffic at more than 80 percent of their overall traffic. However, this has led to constant demand by high-use customers for banking apps that are feature rich and deliver everything their desktop counterparts offer.
Since adoption isn’t slowing, it is no surprise that banks need to respond to the demand for increased functionality. The capabilities of future banking apps will go beyond extending the desktop experience to a mobile-centric framework. They will take advantage of the unique opportunities of mobility — mainly around push notification, but also around payment innovations. In the not-too-distant future, mobile customers will be able to draw money from an ATM without a bankcard. Mobile customers use the app to generate a one-time password that is entered into the ATM. Basically, the app is going to replace the bankcard.
While mobile apps have changed — and will continue to change — how consumers interact with banks, the mobile channel has also been a game changer when it comes to security. Mobile provides vast amounts of information that can be valuable from a security and fraud point of view. Specialized solutions can equip the bank with a wealth of information to uniquely identify a user. And, with the ongoing threat of cybercrime, banks need to ensure that the individual is really who they say they are, but in a behind-the-scenes way that is totally unobtrusive and invisible to the consumer.
Therefore, as mobile transactions continue their upward trajectory, businesses must prioritize a robust mobile security strategy that can verify the trustworthiness and integrity of every mobile app transaction. Part of this strategy must include a solution that detects instances where the app has been compromised, the device or transaction has been tampered with, or the user is testing a stolen identity.
Unfortunately, in many cases, that tension between user experience and robust security still imposes itself, precluding a smooth user experience. Despite the omnipresent threats, today’s mobile users want to transact with speed and have zero tolerance for the friction presented by the traditional security measures deployed for desktop users, such as two-factor authentication using tokens or passcodes. Imagine the consternation of mobile users asked to leave an app experience to authenticate their identity. That doesn’t make for a pleasant mobile experience!
In truth, mobile banking apps are more than just easy access to banking functionalities. They have become, and will continue to be, enablers of new forms of banking and commerce that can have a transformative impact on the banking industry moving forward. Banks and businesses must adapt accordingly to keep the digital banking customer a happy and safe one.
It will be interesting to see how the functionality of these mobile apps continues to develop. What do you think these apps will be able to do in the future?