By: Joe Gillen
There is little doubt as to the growing popularity of mobile banking, and a number of studies reveal that the number of users is expected to climb dramatically over the next four years. However, one of the primary obstacles to increased mobile banking adoption is privacy concerns. Many people are unsure of how well their personal financial information will be guarded over their smartphones, and fears over identity theft risks and fraud have discouraged many would-be users from enrolling in mobile banking. In response, the Federal Trade Commission issued new proposed recommendations that banks and mobile providers can consider in helping put Americans at ease.
For example, the FTC advocates disclosures that enable consumers to provide consent before certain transactions involving sensitive information are performed. This may include incorporating additional password and authentication measures to verify the identity of the user. It's also important that mobile banking providers work closely with app developers to ensure that privacy settings are sufficient and disclosures are firmly in place. In many cases, app developers may not be aware of the myriad of privacy concerns that plague consumers, and financial institutions that work with developers to educate them on these issues may help them develop more secure features.
"The mobile world is expanding and innovating at breathtaking speed, allowing consumers to do things that would have been hard to imagine only a few years ago," said FTC chairman Jon Leibowitz. "These best practices will help to safeguard consumer privacy and build trust in the mobile marketplace, ensuring that the market can continue to thrive."
Educate consumers on how to protect their information
In addition to ensuring disclosures are firmly in place, it's important for banks and credit unions to make consumer privacy education part of their banking strategies. For example, financial institutions should make sure customers understand the type of security measures that are already in place when consumers transmit financial information. This may help put individuals at ease when it comes to conducting transactions via their smartphone. It's also crucial to remind consumers to engage in smart practices, such as maintaining strong passwords, imposing security passcodes on their phone, and monitoring their financial statements for suspicious information. Banks and credit unions should also caution consumers against using public WiFi to access their financial accounts. By having a stake in consumers' security, they may attract more users to their mobile channels and promote more secure financial transactions.�
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