Lenders work to make mobile banking safer and more convenient

As more and more people use smartphones for everything from paying bills to making deposits and checking statements, banks are working to meet customer demands for faster and securer mobile options.

A March report by the Federal Reserve shows that as of Nov. 28 percent of all mobile phone users and 48 percent of smartphone users had used mobile banking in the past 12 months. This was an increase of 7 percentage points from December 2011.

During the same period, consumers using phones to buy items tripled to
6 percent. But the Fed report found that 49 percent of respondents cited concerns about security of the technology as their reason for not using mobile banking, up from 48 percent in 2011.

“Mobile is rapidly growing in popularity,” said Micah Phillips, vice president of product management with Nevada State Bank. “That has a lot to do with the convenience and simple accessibility smartphones offer.”

Phillips said Nevada State Bank offers apps for iPhone, iPad and Android devices that let customers check balances, transfer money between accounts, pay bills and find branches.

Nevada State Bank doesn’t offer remote deposit capture.

“It’s in development and we expect to roll it out at the end of the year,” Phillips said.

Wells Fargo reported that 10.5 million of its active customers nationwide signed in electronically in the last 90 days. That translates into almost half of the nation’s online banking population.

“We’ve had mobile banking since 2007,” said Armin Ajami, vice president for mobile product management at Wells Fargo. “Smartphone adoption has grown tremendously in the U.S. since 2009.”

Ajami said smartphones have led to a lifestyle change with consumers who are “always on, always connected.”

A comScore survey released in April says it all. From December through February 133.7 million people owned smartphones, representing 57 percent market penetration. That’s an 8 percent increase since November.

“We don’t have a preference, Apple or Android,” Ajami said. “Our goal is to help customers succeed financially with whatever device they have.”

More than 500,000 customers were using the Wells Fargo iPad app on tablet computers the end of this year’s first quarter, he said.

A survey conducted in March by Harris Interactive for Jumio, a computer company specializing in electronic security for retailers, shows 56 percent of the survey’s respondents in the West, including Nevada, used tablets or smartphones to check their bank balances, compared with 48 percent of adults overall.

That’s the highest percentage nationwide. The number is 48 percent in the Northeast, 47 percent in the South and 42 percent in the Midwest.

Over time, some of Southern Nevada’s largest banks have enhanced their mobile banking with new services. Bank of America offers mobile banking on multiple platforms including Apple, Android, Blackberry, Kindle Fire and Windows phone.

With Chase mobile banking, customers can perform bill pay, person-to-person payment and mobile check deposit anytime. Wells Fargo, Citibank and U.S. Bank all offer text banking, mobile Web, mobile app and mobile deposit.

Mobile banking seems to be the future, while retail banking seems outdated. But Phillips and Ajami argue there is a future for retail or branch banking.

“We believe we have a lot of access points giving our customers a lot of flexibility,” Phillips said. “Branches are another choice that exists within our infrastructure.”

Nevada State Bank operates 32 branches locally. Wells Fargo has the largest branch network in Southern Nevada with 82, followed by U.S. Bank with 73, Bank of America 53, and Chase with 47 branches.

“Some people never want to use online or mobile banking,” Ajami said. “They want a branch and that’s fine.”

SECURITY CONCERNS

The biggest obstacle threatening growth in this industry is consumer fear that mobile banking’s technology is not secure. Ajami said he understood these concerns, but said mobile banking is secure.

“Security is top of mind for us at Wells Fargo,” Ajami said.

Mobile banking has not had many major cyberattacks.

“Sandboxing” is one technology financial institutions use to prevent cyberattacks. Hackers may try to obtain financial or personal information from a customer’s virtual account by using other apps already installed to infiltrate the banking app. But sandboxing puts a virtual wall, or sandbox, around the app with the sensitive information.

Wells Fargo, Nevada State Bank and others also use secure Web servers. A customer can tell the difference because a secure website has a prefix of https, instead of only http.

Phillips said it was important for each bank not only to address security concerns, but also teach consumers how to manage and use mobile banking apps. Once that’s done, Phillips said, customers begin to move to mobile.

Regardless of comfort, consumers want greater security, the Jumio survey suggested.

Nearly three in four, or 74 percent, would like a more secure way to log into their accounts, and 69 percent said they’d store their personal payment information online more often if they felt confident that information was secure.

“Consumers want to leverage the convenience and accessibility that their mobile devices provide, but the risk is that the structural weakness that enable fraud will eventually impede growth,” Jumio founder and CEO Daniel Mattes said in a statement.

Mattes said for mobile to reach its full potential, the industry must adopt more consistent and accurate ways to identify and authenticate consumers.

“Only then will we be able to truly combat fraud,” Mattes said.

Contact reporter Chris Sieroty at csieroty@reviewjournal.com or 702-477-3893. Follow @sierotyfeatures on Twitter.