Mobile Banking 2.0: Was There a First Wave?

The intense focus on mobile banking is creating a lot of excitement in the marketplace, and its prospects bode well for the future, though the prevailing notion that the industry is facing mobile banking 2.0 is a bit of an overstatement. At last look, 1.0 never registered, but who's counting?

While the benefits of mobile banking are clear, there are some issues to contend with before industry players can expect a groundswell of movement on the consumer front. A recent report fromAite Group argues that security vulnerabilities will be a major issue, but that institutions can and should deal with this so that the m-banking movement can proceed.
While wireless networks are now capable of delivering broadband speed over handsets, Aite Group research suggests that consumers may not yet be ready to have financial information transmitted over cell phones. The desire for mobile banking is one thing, security concerns another. Therein lies the challenge with consumers.
The report, called "Mobile Banking Security: The Black Cloud Attached to the Silver Lining," contends that the same types of security attacks that have affected the online world will find their way to the mobile one.
Aite senior analyst Nick Holland maintains that lack of end-user education about threats to mobile devices, the millions of transaction-enabled handsets and the global reach of the mobile Internet are a virtual guarantee of criminal activity.
This possibility is inevitable. But the betting person in this editor in chief, figuratively speaking, says that the FaceBook generation won't care. If you spend any time perusing the MySpace and FaceBook sites, it's clear that concerns about privacy and security aren't top of mind with the "I Am" generation, New York magazine's description for a generation of young people who share everything-journal entries on heartache, financial information, business plans, photos, personal facts. This is a crowd that cares less about perceived risk than any generation before it-good news for those looking to expand mobile financial services.
With these consumers in mind, Holland argues that "banks must not shun offering mobile transaction services. The end user will become savvy with time, and the channel will eventually develop mechanisms to further aid the customer. The key is for banks to get started sooner than later, in order to accelerate the learning curve and lessen exposure to mobile fraud when it does occur."