Are FinTech Solutions Safe on Mobile?

We live in a digital world where almost everything we touch is being stored on servers, the cloud or in mobile applications. Technologists push for the adoption of digital services and applications while consumers push back for safety and fraud protection. Fintech solutions on mobile are in a predicament; on one-hand these solutions offer the premium convenience of making deposits and transfers on-the-go, and the on the other hand, it digitizes and potentially sells off a person’s most valuable possession: their wallet.

Banks and financial institutions have quite a bit to gain – especially on a global level. Although still in its early stages, the cumulative investment for FinTech in 2017 is forecast to be $150 billion.

FinTech Solutions on Mobile – Hacks Worth up to $25 Billion

“White hat” hackers (the good guys), such as security researcher Sathya Prakash, have been known to expose hacks worth up to $25 billion by taking money out of one of India’s largest banks with just a few lines of code. “I could’ve done this with anybody’s account,” Prakash told reporters at Motherboard – all he needed was an account number. While this hack had a happy ending, with a quick patch and no money lost, not all hacks do. According to Lookout, a mobile security and antivirus firm, as many as 3 percent of Android users have encountered a mobile threat in the past year [1]. This may seem like a small number, but when you consider well-known financial institutions have over 50,000 employees (and some that have over 150,000 employees like Chase or Wells Fargo), the math comes out to 1,500 to 4,500 employees who are potentially introducing risks through their mobile device operating system.

FinTech Solutions on Mobile – Reach Millennials through Mobile Banking

Millennials are digital natives and have become mobile FinTech power users with 87% of those aged 18-35 using mobile services. 71% of them expect mobile banking to transform their future. In fact, Millennials are using mobile banking 8.5 times per month compared to 3.1 times per month for the average mobile banking user. Across all age groups, 60% state mobile banking is the #1 reason for switching banks.

You can access more statistics in the Infographic below.

FinTech Solutions on Mobile – Public Perception of Mobile Banking Security is Low

For those who do not use mobile banking, 57% state it’s because they believe mobile banking is not safe, and 61% cite security as the #1 reason for not using mobile banking. In fact, only 2% of mobile banking users believe it to be “very safe” while more than 50% believe it to be somewhat unsafe or very unsafe [2]. Global financial institutions are doing their best to protect themselves by introducing features such as biometric authentication, 2 Factor Authentication, end-to-end encryption, and AI fraud scanning. Convincing customers to use and embrace these technologies is essential as research shows that users will quickly leave a bank they do not trust.

In addition to building all these technical solutions to solve real security problems, the very real issue of convincing the public to trust a particular financial institution with their assets is a moving target and perhaps a more difficult challenge.

To those who figure this out, leadership of the future financial markets await.

Sources:

[1] https://www.nbcnews.com/storyline/hacking-in-america/new-way-you-ll-get-hacked-through-banking-app-your-n651571
[2] https://www.federalreserve.gov