Budgets Not Keeping Up with Mobile Banking Growth

Despite the clearly growing importance of mobile to banks, it seems the channel is still not receiving its due in terms of budget. 45% of banks said that mobile is allotted 5% or less of current IT budgets. 17% of banks said that 26% or more of their total IT spend goes to mobile.

A new report from CSC and Finextra (PDF) says that the rapid and apparently unexpected uptick in mobile banking use has led to struggles at banks’ IT departments. Because so much effort goes into simply keeping the mobile channel up and running, only 15% of respondents require their mobile banking products to be seen as innovative in the market, according to the report.

The February 2014 survey received responses from 104 individuals involved in the mobile banking effort at 74 different institutions across 25 countries. Results were released yesterday.

Respondents were split on how important mobile is to the banks’ core activities. 46% of the banks said mobile was central to the institution’s IT strategy. But nearly as many — 40% — said that mobile is a niche effort.

• 48% of banks said mobile and online teams are separate but work together
• 39% said mobile and online are handled by one team
• 13% said mobile has its own dedicated team, because every channel requires its own approach

The survey shone an interesting light on testing apps. 65% of banks test apps in-house only, according to the report, while 22% outsource testing and a further 10% look to cloud services for testing help. 10% of respondents do not take actual customer device use into account while testing apps.

The result of inadequate testing, the report indicated, is that the customer experience may not be given the careful treatment it deserves. There is also a security issue with not testing enough. According to a security briefing cited in the report, 40% of mobile banking apps are vulnerable to “man-in-the-middle” attacks, where bank sites and apps can be spoofed, and users tricked into sending their login information to third parties.

The banks ranked person-to-person payments and personal financial management as being more important to customers than bill payment. Most important was checking balances — 75% of respondents called this the most important mobile activity to customers.

The survey also indicates that bankers decisively rate Windows as a more important mobile OS than Blackberry. Apple’s iOS is ranked most important at 57%, followed by Android at 41%.