I WAS recently accused by a friend – a self-confessed geek – of being scared of new technology; I prefer to believe I’m just too cynical to jump on the latest high-tech bandwagon.
That includes mobile banking, which is one bandwagon the banks would very much like us all to leap on to, and in this case my cynicism may be more than justified.
Mobile banking refers to the use of mobile phones and other handheld devices, such as tablets, to make payments, transfer money, check statements and so on. The UK is lagging behind in this area, but our banks are eager to catch up and are ploughing millions into mobile banking development.
With good reason too. They see it as helping them build stronger and more personal customer relationships, for example, while there’s also growing demand from customers wanting the greater control and flexibility that mobile banking undoubtedly provides. By 2020 some 1.5 billion banking transactions will have been carried out on mobile phones, according to The Payments Council, up from 350 million now.
But it’s not just about improving banking services – it’s also about banks cutting long-term costs. The more people carry out their transactions online or using their mobile device, the less need there is to keep branches open. Brett King, of mobile money start-up Moven, has claimed that branches will soon be “nothing more than a twee support system for a mobile service”.
Only last week it was reported that 40 per cent of UK branches have closed since the end of the eighties. The rate of closures is picking up, with Royal Bank of Scotland shutting yet more branches north of the Border over the coming months.
Yet even as they invest in new technology the banks are cutting corners and putting customers at risk. That’s why the Financial Conduct Authority (FCA) was right to act last week when it launched a review into mobile banking. It highlighted risks including the ease with which customers using devices with small screens and keypads can make potentially expensive typing errors, such as paying the wrong person or the wrong amount.
It also mentioned the threat of IT meltdown, such as the error at RBS earlier this year that left customers locked out of their mobile apps, as well as greater vulnerability to fraud.
Both banks and their customers face “potentially staggering risks” unless more is done to protect against mobile-based fraud, software firm Metaforic warned recently.
But don’t rely on the banks to get it right. If you’re using a mobile phone or tablet to carry out transactions, make sure you only use the app provided by your bank; download anti-virus software (offered free by some banks); and keep your passwords secure. For more tips, go to www.banksafeonline.org.uk.