The British Financial Conduct Authority (FCA) has published a report exploring some preliminary findings of a review into mobile banking services. The services include contactless payments, financial transfers and account monitoring, all via mobile devices such as smartphones and tablet computers. The findings highlight possible risks to consumers and areas that companies should consider when developing their services to ensure their products and services are secure, reliable and straightforward to use.
Potential risks may arise in the following areas:
- Fraud: Fraudulent access to mobile banking accounts could result in customers being unable to access their money or make payments, resulting in financial loss, inconvenience and stress.
- Security: Consumers receiving malware or a virus when downloading a mobile banking application.
- Technology risk or interruption to service: A systems failure or an IT problem preventing consumers from accessing their accounts.
- Consumer awareness and understanding: While services are new and consumers are less familiar with using them, it is more likely that payments will be made in error, such as paying the wrong person or paying an incorrect amount.
- Anti-money laundering systems and controls: Mobile banking may be used for the facilitation of money laundering activities, particularly where a mobile payment service is not linked to the customer’s current account and there aren’t additional checks to verify the identity of the payee and recipient.
"By publishing these initial thoughts we want to make sure that the industry knows exactly what we’re looking into, and consumers have a clearer idea of some of the potential risks", says Clive Adamson, director of supervision at the FCA. The full review is to be published in the first half of 2014.
Further information:
TR13/6 – Mobile banking and payments: http://www.fca.org.uk/news/tr13-6-mobile-banking-and-payments
Source: Financial Conduct Authority