29/09/2009 15:00:00

Javelin Survey: As Mobile Banking Heads for Explosive Growth, Consumers Rank Simplicity, Security Supreme

With 86 percent of American adults owning a mobile handset, mobile

banking is poised for explosive growth. Currently 36 million adults are

using mobile banking (smartphone users – 18% of Americans – are the

heaviest users), but by 2014 that number is expected to grow to 99

million adults, according to a new study (Multi-Channel

Authentication Via Mobile Banking:Assessing

the Technologies, Vendors, and Solution Providers) by Javelin

Strategy & Research (www.javelinstrategy.com).

Javelin says the growth of mobile banking will present new risks and

opportunities in authentication – or helping protect consumers by

confirming their identity – and that those financial institutions that

combine affordability, consumer usability and effectiveness will have

the greatest advantage.

In August and September 2009 Javelin polled 2,000 consumers to gauge

their perceptions of mobile banking and corresponding authentication

security methods. It measured ease of use, effectiveness and high risk

authentication and found that:

  • For ease of use: six out of ten consumers prefer simple

    authentication methods such as image recognition. Security

    questions came in close second with 59% ranking the method easy to

    use. In contrast, three in ten consumers ranked biometrics as easy to


  • For effectiveness: Simple security questions – or knowledge

    based authentication (KBA) – ranked highest in effectiveness by 65% of


  • For high risk authentication – Consumers ranked an additional

    security question (also KBA) as the preferred method of authentication

    with three in 10 trusting it as their method of choice.

“Mobile banking is a convenient new channel that is enjoying widespread

adoption,” said James Van Dyke, president of Javelin. “While there are

obviously new critical risks, this ‘always-on’ channel for monitoring

finances can also manage risk across all other channels. A multi-layered

approach to authentication provides the most effective means of

mitigating fraud while improving upon the consumer experience.”

While mobile banking comes with risks, according to Javelin, mobile

authentication can actually help mitigate the risk of fraud across all

banking channels, from ATM to branch. Collectively, new account and

existing account identity fraud adds up to $48 billion, with an average

per-victim cost of nearly $550.

The top two most promising authentication technologies are mutual

authentication and device recognition which provide substantial

protection while offering ease of use, which raises the likelihood of

adoption. Javelin ranked voice and vein pattern biometrics as least


“As institutions look to incorporate mobile banking into their

authentication strategies, most often it will be under a multichannel

umbrella,” said Javelin Risk, Fraud and Security Analyst Robert Vamosi,

author of the study. “The best authentication approach will leverage new

and existing technologies that can cross channels as well mitigate new

risks and take advantage of new capabilities afforded by the mobile


Javelin designated RSA and VeriSign best in class among the 15

authentication vendors analyzed. Tyfone and M-Com ranked best in class

among the 13 mobile banking vendors analyzed for their overall

cross-channel authentication capabilities.

About Javelin Strategy & Research

Javelin provides superior direction on key facts and forces that

materially determine the success of customer-facing financial services,

payments and security initiatives. Our advantages are rigorous process,

independent position, and expert people. For more information about this

or other Javelin reports, please visit www.javelinstrategy.com/research

or contact Elizabeth Travers at (925) 225-9100 ext. 31 or etravers@javelinstrategy.com.

Editor’s Note: To arrange an interview with Mr. Van Dyke, Mr.

Vamosi and/or view research on this topic or a similar topic (available

to qualified members of the press), please contact Crystal Mendoza at

+1.925.225.9100 ext. 35 or cmendoza@javelinstrategy.com.

Photos/Multimedia Gallery Available: http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6060419&lang=en

Javelin Strategy & Research

Crystal Mendoza, 925-225-9100 ext.

35 (Media)


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