Security concerns restrain mobile banking

BY Matt Atkins

Consumer fears surrounding security have dampened interest in the mobile technology services of financial institutions worldwide. These are the findings of Deloitte's new report, Mobile Financial Services: Raising the Bar on Customer Engagement, based on survey data from Andrews Research Associates.

Though financial services companies are largely eager to enter the mobile transaction market, the industry still has work to do before it captures the full potential of today's technology, finds the report.

Of those respondents who do not regularly use mobile devices for financial services, sixty-one percent cited security issues as the prime reason. Over one-third of those surveyed were most insecure about using financial services on mobile devices due to lack of trust in the security of the Wi-Fi and mobile networks transmitting their data. Twenty-eight percent were worried about their mobile device being lost or stolen. One in five respondents believed that the risk of identity theft was greater with mobile transactions.

To address security concerns, respondents supported measures to create more secure Wi-Fi or mobile networks, systems that automatically disable stolen mobile devices, and the adoption of more secure mobile identification methods such as biometric technology.

The survey did indicate that mobile products have been more widely adopted in the banking sector than in other financial service sectors, such as insurance. However, it still finds that banks "are at a decided disadvantage compared to other sectors" when it comes to security.

“The financial services industry is entering a new phase in its digital evolution, with mobile technology reshaping customer engagement in a dramatic manner, and increasingly becoming the primary method of a consumer's interaction with their financial services providers," said Jim Eckenrode, executive director of the Deloitte Center for Financial Services. "To boost adoption and set the stage for more ambitious applications, companies will likely have to take tangible steps to reassure consumers about the security of their mobile financial transactions."

Report: Mobile Financial Services: Raising the Bar on Customer Engagement

SFO turns screw on Barclays

BY Matt Atkins

The UK's Serious Fraud Office (SFO) has ramped up its probe into Barclays's dealings in the Middle East, according to the Financial Times. Former chief executives Bob Diamond and John Varley are due to be questioned under caution by the SFO, along with other senior executives, about alleged corruption in the bank's arrangements in Qatar.

Advisory fees

The SFO is hoping to impose a £50m fine on the bank for failing to disclose £322m in 'advisory fees' paid to Qatari investors, a charge which Barclays contests.

Barclays received Qatari investments worth £4.6bn in two emergency fundraisings in June 2008 and October later that year. The capital raisings, which came to £11.8bn in total and relied heavily on Middle East money, saved Barclays from part-nationalisation in the wake of the financial crisis. The 'advisory services' agreement with Qatar was disclosed in the June capital raising, but not in the October one, contests the SFO. The fees were not mentioned at all.

Barclays disputes the fine on the grounds that the advisory fees did not have to be disclosed under the FCA rulebook. The FCA takes issue with this argument, claiming the payments do not count as advisory fees.

Reasonable suspicion

That the current round of questioning comes under caution suggests the SFO believes it has reasonable grounds to suspect the interviewees have committed an offence. Such interviews, however, do not require arrest and can be scheduled by appointment, as has been the procedure in this case. No charging decision will be reached until the interviews have been conducted.

As the alleged offence dates back to 2008, the ultimate risk for Barclays is a corporate prosecution under the UK’s old corruption laws, since overhauled by the 2011 Bribery Act. Under these laws, the SFO must prove that a so-called directing mind of a company knew of and ordered bribes.

Just last week, Barclays launched a major restructuring plan aimed at boosting sluggish profitability. This news could hardly have come at a more inconvenient time and will surely prove an unwanted reminder of the issues hanging over the bank.

News: UK fraud office steps up probe into Barclays’ dealings with Qatar