U.S. Consumers Believe Mobile Banking is Important but Security, Privacy and Cost a Concern, Study Says

According to a survey by audit and tax firm KPMG, U.S. consumers find mobile banking important but are not willing to pay for it and are wary of using their mobile devices - cell phones, smartphones and personal digital assistants (PDAs) - for financial transactions and online banking.

 

This was presented by KPMG's third annual Global Consumers and Convergence (News - Alert) survey of more than 4,000 people in 19 countries worldwide. In presenting the trends in the use of mobile technology, the study revealed that 85 percent of U.S. respondents believe mobile banking is important but they don’t want to pay for it and 91 percent of U.S. respondents said they had never tried banking through a mobile device.

 

People not opting for banking through a mobile device, cited security and privacy as the primary reason.

 

"Mobile banking is another vehicle banks can utilize to make banking more accessible to customers," said Carl Carande, a principal in KPMG's Advisory and Banking and Finance practices. "Consumers value banking services that make their lives simpler and more manageable and mobile banking afford this convenience, so banks that address concerns over security, privacy, and costs may be better able to retain existing customers and attract new ones."

 

The survey also reveals that 68 percent of U.S. respondents felt their current bank does not offer banking through a mobile device and only nine percent said they had tried mobile banking.

 

"The fact that the majority of U.S. consumers are not aware that their current banks offer mobile banking is clearly more perception than reality," said Carande. "Banks will need to work harder to increase customer awareness of the availability of mobile banking and clearly articulate the value proposition of the service before consumers are willing to pay for it especially in this economic environment."

 

Despite the pricing, privacy, and security concerns, 19 percent of U.S. respondents said they are at least likely to use their mobile device for online banking in the next 12 months. Seven percent said they are willing to pay at least a nominal fee to access online banking services.

 

Regarding mobile payments, 95 percent of U.S. respondents said they never made a purchase from a vending machine using their mobile device and 95 percent said they never made a purchase using a mobile device through a retailer's mobile Web site.

 

According to Mitch Siegel, director of payment advisory services in KPMG's Financial Services practice, U.S. consumers, as well as those worldwide, need to be convinced that new payment methods and banking vehicles were safe and secure for them to succeed.

 

"Once these concerns are addressed, consumer confidence can grow and adoption could potentially increase," said Siegel.

 

"With high mobile device penetration rates, U.S. consumers are accustomed to using the mobile channel to access data," said Siegel. "And it may only be a matter of time before they grow comfortable with using  and potentially paying a premium to use the mobile device for browser-based and point-of-sale, 'contactless' financial transactions."