Mobile has transformed how consumers prefer to be identified when accessing their financial services, according to Telstra.

Mobile has transformed how consumers prefer to be identified when accessing their financial services, according to a new report released by Telstra.

The June 2015 report titled Mobile Identity – The Fusion of Financial Services, Mobility and Identity examines the changing attitudes towards the identity of Gen X and Gen Y individuals and their use of mobile devices.

Focusing on the topics of identity and security, the study surveyed 318 financial services executives and 4,272 consumers in seven countries: Australia, Singapore, Malaysia, Indonesia, Hong Kong, the UK and the US.

Rocky Scopelliti, Global Industry Executive of Banking, Finance and Insurance at Telstra Global Enterprise Services said that in 2014, more consumers interacted with their bank through their smartphone than any other channel.

“This inflection point has forever changed the industry. We are now transitioning to an omni-present customer engagement model, characterised by expectations of predictive, personalised and presence-based financial application experiences that are part of the fabric of our increasingly inter-connected lives,” Scopelliti said.

“But just as the mobile device has become our gateway to the financial services world, it has also become the source of new risks for both individuals and institutions.”

Security seen as key challenge

The findings show that in 2014, 53 per cent of consumers surveyed rank trust as the most important driver when it comes to choosing a financial services provider.

However, according to the report, less than one in two consumers are satisfied with their institution’s security performance, with 38 per cent of consumers affected by identity theft in the past year.

Out of those who have been compromised by cybercrime and identity theft, 40 per cent hold their bank responsible and 65 per cent said they were very likely to seek an alternate provider.  

The results are sobering for financial services institutions, particularly as the threat of security breaches are on the rise. In 2014, nearly half (45 per cent) of financial institutions suffered economic crime and 62 per cent of financial services executives surveyed acknowledged that there has been under-investment in identity and security-related capabilities in their organisation in past years.

“Security of finances and personal information is [no longer] just a key acquisition driver; it is also essential for retaining customers,” the report states.

“The results from this study indicate that whilst financial institutions have under-invested, they are transitioning into a new phase of identity. However, disconnects remain with the expectations of their Gen X and Y customers.”

According to Scopelliti, for financial services institutions to meet the changing expectations of Gen X and Gen Y, a new customer engagement and analytics model is required – one that enhances value, whilst also reinforcing the trust that consumers place in their financial institutions.

“The financial services industry is moving from an age of digital disruption to one of digital survival,” he said.

“For the financial services industry to transition into this new mobile digital era, significant developments in the trust paradigm are required to attract and engage Gen X and Y and provide them with the security they desire.”