New rules from the CMA on mobile banking transform the finance industry says our Managing Director Paul Jarrett
The latest announcement from the Competition and Marketing Authority (CMA) stating that all banks must offer all of their services via a single mobile phone app by 2018 prove just how important the mobile device is.
It’s not news that we live in a connected world, or that mobiles have become a vital tool for everyday life. In fact we’ve seen many businesses and entire industries evolve and mobilise their offering to improve the customer experience. So it was only a matter of time before we saw the financial industry follow suit.
We already have access to mobile apps for basic financial tasks, such as checking balances and moving money between current accounts, but these are limited and don’t give us an overarching view of our entire finances.
The new rules released by the CMA initiate a huge transformation within the financial industry, where we’ll witness the entire sector evolve its traditional structure to put the control into the consumer’s hand.
Forcing banks to share service offerings in one single app gives consumers greater visibility of the services they can use and more power over how they manage their money both day-to-day and longer term.
A key issue that will undoubtedly cause debate between both banks and consumers is security and the protection of customer data. The new rules in the Open Banking programme state that banks will be required to share customer data.
Having worked on a number of apps for the financial sector, I’ve had a lot of conversations on security and data protection, and more specifically addressing concerns over fraud. There’s a common misconception that mobile devices aren’t secure, however protecting data has been the key driving force behind the majority of mobile development in recent years.
Understandably the risk becomes much higher when accessing financial data, however huge financial corporations are already managing money through apps, and the technology to support is on such a large scale is there. It’s also important to realise that we already share vast amounts of data about ourselves today than we would have been comfortable with a few years ago. Our data is shared through our searches on Google, our social and personal details on Facebook or location through services such as Uber.
As with all apps that exchange data the core of the security sits behind the API’s and servers at the bank. Whist the data is more valuable and sensitive almost all great apps out there run through this methodology and therefore securing such services is not a new challenge
I can however still understand why consumers may be apprehensive towards the programme. The industry faced a similar situation when online banking was originally launched, and more recently, with the launch of contactless payments. Some customers are still wary of sharing their data, particularly when it comes to money.
The success of the Open Banking programme will inevitably be down to its execution. Just like any other mobile app or initiative, it needs to be communicated properly to the consumer. The banks need to be transparent with how data is accessed and shared, and the entire adjustment to mobile needs to be as consumer focused as possible.