Only One in Five Consumers Feel Protected From Fraud During Mobile Banking, Survey Finds
Posted September 26, 2011
Results From a Joint Study by ThreatMetrix and The Ponemon Institute Indicates Mobile Banking Still Has a Long Way to Go to Gain Consumer Confidence
LOS ALTOS, CA – September 26, 2011 – ThreatMetrix™, the fastest growing provider of cloud-based fraud prevention solutions that do not require personally identifiable information (PII), today announced results of a joint study with The Ponemon Institute, “Mobile Payments & Online Shopping Survey of U.S. Consumers.” The survey, which looked at U.S. consumers who self-reported they are active users of the Internet, revealed that only 21% feel they are completely protected against fraudsters when conducting mobile banking activities.
For purposes of the survey, mobile banking was defined as “…a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a smartphone or tablet.” The majority of respondents (46%) feel somewhat, but not completely protected from fraud in this channel, with 23% reporting they do not feel protected at all. An additional 10% are still unsure about the level of fraud prevention measures surrounding mobile banking.
“Mobile banking is still a very new strategy for consumers and banks alike,” said Bert Rankin, vice president of marketing, ThreatMetrix. “The big question here is how banks can overcome this barrier to mobile adoption, and enable consumers to feel more secure when conducting transactions from their smartphone. While our survey results showed that many consumers found this functionality to be convenient, the overwhelming majority are still hesitant about mobile banking.”
According to the survey results, only 29% of consumers said they have indeed conducted mobile banking. Of those who have used mobile banking, half reported they did so out of convenience. Of those who expressed they have not used a mobile device for banking purposes, the same percentage (51%) cited it was because of diminished security. Twenty-three percent indicated that privacy concerns inhibited their use of mobile banking.
“Mobile, in particular, is difficult to protect from fraud,” said Julie Conroy McNelley, senior fraud and risk analyst at the Aite Group. “With around 4,000 different device types to secure, it’s often a daunting task. On top of that, few consumers are using anti-virus or anti-spyware software on their mobile devices. Mobile, just like more traditional e-commerce transactions from a desktop, has the potential to become a hotbed for fraud.”
Along with mobile banking, mobile payments still have a long way to go for widespread adoption, according to survey results. In the survey, a mobile payment – sometimes known as a mobile wallet — was defined as “an alternative payment method. Instead of paying with cash, check or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods. Sixty-percent of surveyed consumers have never made a mobile payment, despite the fact that the majority own a smartphone.
However, eighty-four percent of consumers indicated that it is “important” or “very important” for online payment service providers to express a commitment to protect them against fraud and other abuses – especially in the mobile channel.
“Many of today’s payment providers have yet to fully embrace and promote their fraud prevention strategies,” said Rankin. “This is reflected in consumer preference to use either credit cards or PayPal when making a mobile payment today, as these payment methods are most familiar to consumers.” Sixty-one percent of survey respondents said they prefer PayPal, with 53% indicating a preference for just using a credit card. “Other payment processors like Google Wallet and CheckFree should be aware that fraud is a very real concern and often a barrier to consumers using these services when shopping from a mobile device.”
For a free Executive Research Summary of the “Mobile Payments & Online Shopping Survey of U.S. Consumers” download it here. Other topics covered in the survey include online spending intentions and fraud outlook for Cyber Monday and the upcoming holidays, as well as findings around social media and government-related payments.
The Ponemon Institute© is dedicated to advancing responsible information and privacy management practices in business and government. To achieve this objective, the Institute conducts independent research, educates leaders from the private and public sectors and verifies the privacy and data protection practices of organizations in a variety of industries. For more information, visit www.ponemon.org.
ThreatMetrix®, The Digital Identity Company®, is the market-leading cloud solution for authenticating digital personas and transactions on the Internet. Verifying more than 20 billion annual transactions supporting 30,000 websites and 4,000 customers globally through the ThreatMetrix Digital Identity Network®, ThreatMetrix secures businesses and end users against account takeover, payment fraud and fraudulent account registrations resulting from malware and data breaches. Key benefits include an improved customer experience, reduced friction, revenue gain and lower fraud and operational costs. The ThreatMetrix solution is deployed across a variety of industries, including financial services, e-commerce, payments and lending, media, government and insurance.