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Mobile Banking Providers Should Cool Their Jets a Bit

By Maria Bruno-Britz, Bank Systems & Technology Last week, I reported on the sudden flurry of announcements around mobile banking and payments applications in the U.S. A number of deals were highlighted. Well, I'll now add to that the most recent mobile banking rollout by Citibank for its California customers. It would seem there's no stopping mobil

By Maria Bruno-Britz, Bank Systems & Technology

Last week, I reported on the sudden flurry of announcements around mobile banking and payments applications in the U.S. A number of deals were highlighted. Well, I'll now add to that the most recent mobile banking rollout by Citibank for its California customers. It would seem there's no stopping mobile banking now.Or is there? At least one analyst is speaking up amidst the hoopla. Gartner's Alistair Newton, research director for its financial services research team, says that banks better pay attention to consumer's concerns around security before pushing this channel on them. "Adoption of mobile banking and payments by banks and consumers has been slow, limited to programs in countries that have either had a dominant mobile telecommunications supplier or minimal banking infrastructure," Newton said in a statement. "However, a key hurdle to further adoption is assuaging consumer concerns about the security of banking or payment applications on the mobile phone."

Newton isn't the only one who urges caution in this area. For more on the evolution of mobile banking, see Retail Payments Business Moving More Toward Mobile where I discuss the issues around adoption of m-banking in the U.S. at greater length.

The bottom line is, for mass adoption of this channel to occur in this country, banks need to work very hard at convincing people that m-banking is safe. BS&T's Nancy Feig talked about this very issue in Everyone's Ready for Mobile Banking, Except Consumers. Of course, the early adopters tend to be less nervous about technology in general and won't require as much hand holding. However, if financial institutions wish m-banking to catch on among the greater portion of their customer bases, a good deal of education will be in order.

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