With new channels and services, I've often thought that consumers don't care as much about security as they claim to — but they do care about reliability. So I was surprised to see that Citi blamed a recent payment problem on the coding of its iPad app when the problem has occurred in other channels.
From July to the end of last year, some consumer bill payments were accidentally sent twice, the New York Times reported Thursday evening.
Citi says that this problem was specific to a coding issue with the iPad app, and a Citi spokesperson confirmed this assertation today to an American Banker reporter. However the Times reporter insists at multiple points in the article that this problem also showed up for non-iPad users.
I was a Citi customer in the days before the iPad existed, and I've seen this kind of problem in other channels. Years ago, shortly after I was married, I often made online transfers between my personal account at Citi and my wife's account at another bank — and at least once, I observed that the transfer was duplicated.
In that instance, Citi reversed the duplicated transfer right away, before I realized anything had gone wrong.
I'm not surprised that the iPad app has bugs — I have numerous mobile banking apps on my phone and most of them are updated regularly for unspecified "bug fixes." But if the problem is occurring for more than just iPad users, then Citi is doing itself a disservice by placing the blame on its mobile app.
Banks today are struggling to make mobile channels useful and, ultimately, profitable. If Citi, or any bank, turns the mobile channel into a scapegoat for its problems, it might leave a lasting impression that the channel is somehow unreliable.
Take, for example, Rudder. The defunct personal financial management provider focused its efforts on sending data to mobile users as regular emails that were formatted to fit smartphone screens. But something went wrong, and on May 19, 2009, some of Rudder's emails went out containing the data for the wrong users. The company shut down a year later.
I don't mean to suggest that the data breach was the sole reason Rudder failed — and I certainly don't mean to suggest that Citi's glitch has doomed its mobile channel — but mobile banking and especially mobile payments are still a hard sell for consumers today.
In a recent interview with Bank Technology News, Tracey Weber, Citi's head of internet and mobile banking for North America consumer banking, said Citi has some good ideas for using its iPad app to engage people in ways that aren't possible in other channels.
"The immersive aspect of the tablet is a big deal," she said. "The fact the people use it when they have more time lends itself well to personal financial management, as opposed to the Internet, which is more traditional … You can use the web for that kind of immersion, but the content is not quite as rich."
If, as may be the case here, Citi's payment problem involves more than just an iPad glitch, the company should be careful about letting the nascent and still delicate tablet banking channel, one that it has high hopes for, take most of the blame.
Daniel Wolfe is an editor for risk management and technology at American Banker. The views expressed are his own.