Academic journal article Journal of International Technology and Information Management

An Investigation of Features and Security in Mobile Banking Strategy

Academic journal article Journal of International Technology and Information Management

An Investigation of Features and Security in Mobile Banking Strategy

Article excerpt

INTRODUCTION

With the popularity of mobile devices today, mobile banking is one of the important strategies the banking industry faces. The major reason is that mobile devices have surpassed desktop PCs and become the mainstream of the personal computers, especially for the younger generation. Not only have large banks such as Chase, Wells Fargo, Bank of America, and Citi Bank adopted mobile banking, but many small banks and credit unions now try to offer mobile banking to their customers. Based on a recent survey of 1, 115 U.S. consumers, Aite Group predicted, "... the number of U.S. consumers using a mobile device to access their bank account will increase from 33 million to 96 million by 2016 ..." (Adams, 2012). One of the major issues arising from this trend is what type of financial institutions will adopt mobile banking more quickly and what features will the institutions offer. Another one is the security and privacy concerns consumers have in using mobile devices.

Only a few years ago, most thought that only the large banks would be able to offer mobile banking, but today even the small credit unions are considering mobile banking, because it is cheaper than call centers. Furthermore, some credit unions even think that mobile banking could be a competitive advantage when they compete with large banks (Garrett, 2011). Many studies have identified the major factors for adoption of the mobile banking services, such as perceived usefulness and risks. However, after a period of usage experience, customers tend to evaluate the features offered by the service provider and decide whether they will continue the service (Kumar G. & Ravindran, 2012). Therefore, first, this article explores the characteristics of the financial institutions that will impact their willingness to adopt mobile banking. Second, the article explores the various features offered in mobile banking, and finally, because perceived risks are considered as important factors for frequent or non-frequent users (Chen, 2013) it studies mobile banking's security and privacy and how it differs between commercial banks and credit unions. Specifically, we explored the following research questions:

1) Do size, charter type, and number of states covered by the financial institutions affect the adoption of mobile banking?

2) How are size and number of states covered by the financial institutions related to the adoption of the mobile banking service features and security methods?

3) How is the charter type of the financial institutions related to the adoption of the mobile banking service features and security methods?

4) Are there any differences between commercial banks and credit unions in mobile banking service features and security methods?

5) How are size, number of states covered, and the charter type of the financial institutions related to the mobile devices supported by mobile banking?

This paper is organized as follows. First, we review past literature on mobile banking. Second, we discuss service features and security methods used by mobile banking. Third, we describe the research method and research framework. Fourth, we analyze the data and explain the results. Finally, we discuss the conclusions and future research implications.

LITERATURE REVIEW

While there have been a number of studies on the mobile banking, it has become popular only in the last few years. The focus of published literature on mobile banking can be divided into the following categories: 1) the differences between online banking and mobile banking, 2) the benefits of using mobile banking, 3) the adoption of the mobile banking or the resistance factors to mobile banking, 4) the functions or features of mobile banking, 5) the various devices for mobile banking, and 6) the security issues of mobile banking.

Mobile Banking vs. Online Banking

While mobile banking is a subset of online banking, there are differences between the two. …

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