Security concerns are commonly cited as the reason for the lack of widespread adoption of mobile banking. But there is risk with every type of payment - lest we forget the growing list of recent major retailer and restaurant card data breaches.

With the rising number of mobile wallets by non-banks such as Apple, Google and PayPal staking their claim, banks need to be in the game. Financial institutions taking a mobile first approach may be the ones to finally push mobile banking forward.

A History of Payment Risk

Twenty years ago, washing checks was an $815 million annual problem and rising but that didn’t stop people from writing checks. The problem was addressed through the use of check security features such as watermarks, security ink, holograms and visible fibers. Banks educated consumers about proactive measures to prevent check fraud such as proper disposal of old checks, careful review of monthly statements, not placing bills in residential mailboxes and picking up new check orders at the bank instead of home delivery. 

Payment risk nowadays has shifted with consumers’ preference for credit and debit cards. Card fraud has taken the hot seat over the past year with multiple cases of stolen data, yet people still use them. The breaches have pushed the implementation of EMV cards closer to reality.  It also has reignited conversations about mobile banking and payments.

Mobile First

Many banks recognize the opportunities in the mobile channel and are adopting a mobile first strategy. The concept is simple. Instead of designing for the branch or online, they figure out what works best for mobile and then apply those lessons in other channels.

They see the branch of the future as a hub for teaching customers how to use self-service channels for routine, repetitive tasks such as deposits, withdrawals and checking balances. As consumers learn how easy and secure it is to deposit a check remotely and pay bills while waiting for a doctor’s appointment or sitting in an airport, they will become more open to additional mobile banking services.

Some banks tackle the critical task of a successful mobile offering by employing experts in digital strategies who lack a financial background. These experts create a user-friendly, intuitive and consistent customer experience that works on mobile phones, tablets, websites and ATMs. The banking professionals ensure that risk, security and compliance are adequately addressed.

Why the holdup?

One of the most common reasons associated with the lack of adoption of mobile banking is security - including lost or stolen phones, payment safety and storing sensitive data on devices. But these risks likely are more about the unknown than actual occurrences.

In a recent survey by, 80% of banks reported they have experienced no losses as a result of remote deposits. The biggest security risk with this type of mobile banking is duplicates, where the check is remotely deposited and then cashed again elsewhere. Just like the era of check washing, banks are addressing this by setting value and volume limits along with restrictions on funds availability.

Also, there are many things consumers can do to make their devices more secure. It can be as simple as password protection for mobile devices and using automatic locking after periods of inactivity. Some phones and tablets have biometric protection that requires your fingerprint to activate them if the owner configures it. Apps and services are also available to locate a device if it is lost or stolen.

If all that isn’t enough, there is technology that can wipe smart phones clean no matter where it is located. It’s like a digital version of the American Express Traveler’s Cheque.

Looking back over the history of banking, every financial transaction has been susceptible to fraud risk. As those risks are addressed, fraudsters move on to the next target. It isn’t a matter of if mobile will face security issues but when. That doesn’t mean it isn’t a viable banking channel or that the security challenges are insurmountable.

Digital may prove to be the most preferred channel one day. It may even be the most secure. Mobile streamlines account opening, simplifies banking for customers and provides more opportunities to sell products. It is where innovation is happening. Is your bank ready?

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.