Limitations to banking apps slow consumer adoption

Mobile banking has grown significantly in recent years but service restrictions hold up wider acceptance

By Michael McCaw | 25 April 2018

While a growing number of consumers are using mobile banking applications to undertake everyday banking activities the fact that a number of services are unavailable and security procedures can be tasking has led many to continue to rely on web platforms and more traditional means to fulfil their banking needs.

“There are limitations to the mobile banking app,” says Karen Augustine, senior manager of primary data services at Mercator Advisory Group.

While bank customers are growing more accustomed to mobile apps, they continue to rely on other ways to interact with their accounts.

“I think that’s because they have to launch their app, they have to log into it and remember their long pass code, and make sure that whatever they want to do they can actually do on their app,” says Augustine. “Not every app allows them to get to where they want or find out what they want to do.”

Augustine co-authored Mercator’s report on mobile banking, published earlier this year and which included extensive surveys of the consumer banking market.

“[Using an app] is easier if you’re doing something like checking your balance but not everybody has full functionality on a mobile app,” she says.

The Mercator report highlights – unsurprisingly, perhaps – that app-based mobile banking has seen a sharp increase in popularity and engagement. Moreover, those who do use apps are keen converts, but still rely on branches.

“People who interact with mobile banking do so frequently. They don’t want to have to go into the branch often,” says Augustine. “They go into the branch for different reasons but in general if you’re using a mobile app it’s your favourite method of banking. People like to have the choice,” she says.

During the survey, most respondents said they were using a mobile app to check balances, review statements or confirm transfers. Surprisingly, the next most popular task for those using the app was in depositing cheques. The third more popular use for the app was transferring money between accounts and the fourth to pay bills.

“Just-in-time transfers are a big thing – when customers remember they need to transfer money.”

While mobile banking generally has enjoyed exponential growth in recent years, those who still rely on the traditional channels of engaging with their banks still cite cyber risk concerns as a primary reason as to why they haven’t embraced the technology.

“People are more worried about it now,” says Augustine. “Even the people you wouldn’t have thought would be worried about it – who you would have thought were more confident.”

According to the 2017 Thales Data Threat Report, Financial Edition, which surveys the sector on a global basis, 49% of financial services providers had suffered a data breach, with 21% being breached more than once, until the end of 2016.

“People are more apprehensive because of everything that’s been going on,” says Augustine. “Cyber security is still the number one reason why people who don’t mobile bank choose not to.”

Acknowledging that consumers are aware of a profligacy of cyber attacks, Augustine points out that mobile banking can however be even more secure because of the strict authentication processes required by apps.

“There’s a lot more fraud going on online, but I do think the authentication process can be more secure than any other way,” she says.

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