Mobile banking benefits both consumers and firms - FCA

Mobile banking and payments are on the way. And the Uk's leading Financial regulatory body are now recognising it. The Financial Conduct Authority (FCA) published this month a thematic report into Mobile banking and payments. The report assesses the market, highlighting its key benefits and some challenges firms need to overcome to deliver a strong mobile proposition.

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The overall message from the FCA is one of positivity. The prospect of a boon in mobile banking and payments is beneficial to both consumers and business:

"The drive to a more digital approach is delivering cost and convenience benefits for both consumers and firms"

There is also a wealth of evidence in the report that there is large demand from the consumer side to use mobile banking as an alternative to physical branches. For example the FCA cite a report, 'the future of banking', by Deutsch Bank in 2013:

"On average, mobile banking consumers interact with their bank more frequently - up to three times more than consumers that bank online and 20 times more than those that bank via their branch."

And furthermore from the FCA:

"Our work suggests that in the UK there has been an 18% net reduction in the total number of bank branches in the 10 years to 2013. This has led some industry analysts to speculate that a reduced branch network will be reserved for personalised services such as mortgage advice, while digital channels will become the norm for routine transactions."

There is evidence here that mobile banking is creating consumers who have far greater visibility of their financial situation because of the flexibility Mobile banking gives them. In theory, consumers should be more financially responsible and aware than ever before.

"The drive to a more digital approach is delivering cost and convenience benefits for both consumers and firms"

The report also highlights the importance of security for the success of Mobile banking and mobile payments and cites Vocalink's report, 'Mobile usage: attitudes and payments insight report 2013':

"Security and resilience considerations are important for ensuring a safe and reliable consumer journey. Concern around the security of mobile platforms is one of the principal reasons for consumers choosing not to adopt mobile banking products and services."

We agree here at Ensygnia that security is of the upmost importance. That's why we've created a system that does away with vulnerable usernames and passwords. We use a device-based authentication process. That means no more headlines about user databases being stolen.

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Read the full FCA report here.

 

 

By Matthew Taylor 19th September 2014