“Securing” the consumer experience in Mobile Payments

According to Ovum, to support revenue growth banks need to focus on customer experience and production innovation. How can mobile payments help financial institutions re-engage with their consumers? And what role does security play in this?

Paying for something is the last thing anyone wants to do. What if it could be made into an experience – where you have, at least, the feeling of being in control of your finances or even getting rewarded for spending your hard earned cash? Mobile changes the banking experience. Right now Apple, Paypal and Google are at the forefront of this new experience.

Adding value
Mobile payments provide financial institutions with the ideal opportunity to re-establish themselves as a central part of the consumer’s purchasing experience. By offering value added services that are relevant and user friendly, they can strengthen their relationship with their customers.

For instance, with an App banks can provide real-time access to services or offers at the time of purchase as well complementary services such as financing or leasing when the consumer is most engaged. The Spanish bank – BBVA, is a good example. And financial institutions can learn from the retailers. Take Amazon – they are also transactional but add value by including context and recommendations to each interaction.

Why is it so hard?
Security is still the undisputed consumer requirement when it comes to mobile payments.

What makes mobile such a challenging environment is that there are so many players all touching the mobile device without any single one taking complete ownership for the end-to-end security. Even with Apple Pay, where Apple is the primary owner, fraud is becoming a widespread issue due to the indirect relationship between banks and Apple. It revolves round the enrolment process – there’s no clear method to make certain that the card being loaded securely into the iPhone secure wallet belongs to the iPhone’s owner.

Innovative Security
Solving this linking issue is an essential. Validating that the device is in use at the time; not malware generating a positive response or in the case of Apple, ensuring you are you! One of the best ways, I’ve seen to solve it, is to use software that leverages the hardware security of the device. It allows consumers to interact with the device in a compelling way and establishes security as they go.

And there are more personalized possibilities for authenticating the consumer beyond a pin code. It could be as simple as tracing a shape on the screen or clicking “OK” on a video clip. In the future combining certain biometric data with an anti-fraud system of buyer behavior could also be possible.

Financial Institutions who can incorporate security to new consumer services in an innovative way will differentiate themselves. And I predict, just as the consumer experience is becoming a pay-TV operator’s brand, we will start to see the same in the financial industry.