All money will soon be digital

Mobile Wallets: A benefit to consumers or another weak link for security and compliance in an already vulnerable ecosystem?

The rapid advancement of technologies such as analytics, Blockchain, cloud, mobile and social media have created major opportunities to drive a better customer experience for financial service providers but are also spawning headaches when it comes to security and compliance. At the centre of this customer-centric innovation is the mobile wallet, which is a terrific way for consumers to shop card- or cashless and effectively manage their banking and financial planning tasks while on the go. Per Statista “Chart of the Day” based on Ericsson’s most recent Mobility Report, the number of mobile subscriptions. 

Weighing in on the advantages and disadvantages

"A stick has two ends", a Russian idiom, meaning that when you fight with a stick be careful not to strike yourself when attempting to strike the opponent. At one end of the stick mobile services offer many benefits to both financial service providers and consumers such as:

  • Streamlining of processes are cost-effective and efficient
  • Pairing of operational and administrative tasks can lower costs
  • Meeting the fast-paced demands of consumers anywhere and anytime
  • Reaching underserved or underbanked segments with new services
  • Consumers can win precious time dealing with transfers, payments, and purchases or other banking relevant tasks while in transit

At the other end of the stick is the bad, the mean and the ugly:  

  • Infrastructure complexity increases as the ecosystem of users continue to expand so do the vulnerabilities
  • Risky user behaviour, especially with a mobile device. For example, 70% of smartphone users have never installed an anti-virus program on their mobile device
  • Mobile devices are connected to a network 24/7
  • WI-FI networks and Bluetooth technologies making it easier for attackers to carry out a financial crime campaign
  • Rogue mobile applications, repacking of apps and ransomware are on the rise
  • Advance Malware & Viruses for online as well as mobile devices continue to increase