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Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

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April 20, 2015


Fed Survey Shows Mobile Banking on Rise in Southeast

In August 2014, the Retail Payments Risk Forum conducted a mobile banking and payments survey of financial institutions in the Sixth Federal Reserve District. (The Sixth District comprises Alabama, Florida, Georgia, and portions of Louisiana, Mississippi, and Tennessee.) The Federal Reserve's Board of Governors has annually conducted a national survey of mobile financial services for the last four years from the consumer perspective. We conducted this inaugural survey to determine the level and type of mobile financial services offered by financial institutions (FIs) in our region. (At the same time, the Federal Reserve Banks of Boston, Dallas, and Richmond conducted an identical survey of the financial institutions in their districts. (So far, only the results of the Dallas District's survey are available.)

Of the 189 validated responses, 75 percent were from banks and 25 percent from credit unions (CUs). Six of the respondents (five banks and one CU) indicated that they did not currently offer nor had any plans to provide mobile banking services. The two most important reasons given by the FIs for not offering the service were security and regulatory concerns.

The full survey report is available on the Retail Payments Risk Forum website, but some of the key findings from the survey include:

  • While mobile banking was first launched in the United States in 2007, it is a relatively new service for many FIs in the Sixth District. Almost 23 percent launched it within the last year, and an additional 15 percent are planning to offer mobile banking within the next two years.
  • The primary reason FIs selected for offering mobile banking was to retain customers. Some saw it as an opportunity to gain new customers.
  • There is very little difference in the basic mobile banking functions that banks and credit unions offer.
  • Sixth District FIs use more than 30 mobile banking application vendors, although there is a large concentration with three of these providers.
  • Despite the current headlines, the respondents expressed little to no interest in using biometrics and tokenization. (But note that the survey was conducted before the Apple Pay rolled out.)
  • Security concerns related to identity theft, data breaches, malware, and poor customer security practices remain primary concerns of FIs.
  • With the possible exception of the remote deposit capability, FIs do not expect to charge customers for mobile banking or payment services.
  • The mobile payments environment is nascent and highly fragmented in both the number of vendors and the wide range of technologies. This fragmentation has created some inertia while the FIs wait for the environment to sort itself out.

The Retail Payments Risk Forum plans to conduct this survey every two years in order to measure changing penetration and attitudes. If you have any questions concerning the survey results, please contact me via e-mail.


April 20, 2015 in mobile payments | Permalink

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