Ease of use with security is key to mobile banking success

Over the next five years, mobile banking deployments will develop significantly - from "online banking-lite" applications to one with richer interfaces and multiple mobile payments capabilities. Yet new research from TowerGroup finds that the most critical driver for the successful evolution of mobile banking and payments will be the ability of financial institutions and mobile operators to balance ease of use with security.

Considering both the newness and sparseness of mobile banking offerings, initial consumer take-up has been surprisingly strong - with almost 1 million US consumers using mobile banking at the end of 2007. Yet dire consequences may result from security procedures that are either too lax, or too stringent. If consumers find registration and authentication procedures burdensome, adoption of this new channel will slow. If data security is compromised, negative publicity will quickly sow fears about the safety of banking "over the air."

Banks must also be wary of mobile operators that wish to control the emerging mobile payments space and profit from the anticipated high volume of mobile transactions. Although the mobile operators deserve their fair share of mobile banking and payments revenues, TowerGroup believes that consumer banks - with deep expertise in payments processing and maintaining trusted consumer relationships - must be the central player in this burgeoning market. By implementing mobile banking solutions that align with market expectations and needs, consumer banks can lay the foundation for mobile banking and payments success - and ensure their central role in future deployments.

The TowerGroup ViewPoint titled, "Mobile Banking and Payments Security and Usability: What's in Your Mobile Wallet?" provides insight on key issues surrounding mobile banking development, authentication and security.

(This is press release of TowerGroup)

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