Smartphones are the New Hub From Which Consumers Run their Financial Lives

Smartphones are the new hub from which tech-savvy consumers run their financial lives.
In the developed world, bank branches are closing at an accelerated rate due to a decline in the use of cash and the huge uptake of digital payment systems. In the UK, the number of physical branches has more than halved since 1989. Here in Africa, branches have always been thinly distributed. Wherever you happen to be, mobile phones offer a more convenient way to bank and transact.

As mobile technology becomes more sophisticated, consumers expect full banking service delivery to their smartphones. This is fundamentally altering the financial services industry, which must now find new ways to deliver up-to-the-minute mobile services quickly and securely.

There are challenges, of course.

“Consumers already use a number of authentication methods to access bank and payment services through different channels. For example, a bank customer might use a hardware token for online banking, an SMS one-time password to approve an e-commerce payment, a knowledge-based authentication method for telephone banking and a PIN code or biometric authenticator for mobile transactions,” says Schalk Nolte, CEO of mobile security specialists Entersekt.

That lack of consistency or predictability frustrates people. There’s a lot of evidence that it also confuses them and makes them anxious.

“Applying one authentication method across all channels is a far more efficient and user-friendly approach. Smart mobile devices make this possible. Putting smartphones at the heart of identity and authentication across multiple channels makes consumers’ lives easier and simplifies their interactions with banks,” adds Nolte.

South African banks like Absa, Capitec and Nedbank use Entersekt’s Transakt mobile authentication system to guard against fraud when customers use digital services.

“Banks are pursuing a mobile-first strategy, which has multiple advantages for consumers. For example, smartphones can be used when withdrawing cash at an ATM – no need for a bank card. Loan requests are sped up from days to minutes, digital customer sign-ups are supported and biometric technology means authentication is far more convenient,” says Nolte.

“Consumers can now benefit from a new range of financial services, delivered quickly, conveniently and securely to their mobile devices.

“Banking is being reinvented and consumers are the big winners. Competition from fintech service providers plus regulatory pressure to open up banking and payment markets means banks are taking a firmly customer-centred approach when designing and introducing new, predominantly digital, financial services.

“By matching agile digital banking with convenient standards-based mobile authentication, banks can concentrate on delivering innovative and competitive products that help them retain existing customers and acquire new ones,” concludes Nolte.

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