U.S. consumer concerns that hackers may gain access to private financial information are slowing use of smartphones and mobile devices for personal banking, said Sandra Braunstein, director of the Federal Reserve’s consumer and community affairs division.
“Consumers expressed concerns about hackers gaining access to their phones and exposing their personal financial information,” Braunstein said in remarks prepared for testimony today to the Senate Banking Committee in Washington.
More than a third of mobile phone users surveyed by the Fed said they do not know how well the technology protects their confidential information, and another third said that the services are “unsafe,” according to Braunstein. Ten percent of consumers with mobile phones who haven’t used mobile banking expect to start within a year, she said.
Braunstein said at a July 13 House Financial Services subcommittee that the Fed will play a role in supervising and enforcing consumer regulations, even as many of its duties are shifted to the new Consumer Financial Protection Bureau.
Kenneth Montgomery, chief operating officer of the Boston Fed, also testifying before the Senate committee, said in prepared remarks that the central bank has formed a mobile payments industry working group to study “how a successful retail mobile payments ecosystem could evolve in the U.S.”
The group includes representatives of several large banks, credit card networks, the two largest mobile carriers, payment processors and members of the Fed Board of Governors and the Treasury, Montgomery said. The group meets four times a year.
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