Traditional banking has been facing a stiff competition in recent years from mobile banking.

With the help of mobile banking, customers have now been able to bank anytime and anywhere,
including when they are travelling or on the go. However, with this increasing demand for
mobile banking has come an increase in security risks that traditional banks need to take. If a
customer's data is breached due to having their information stored in their phone's internal
memory rather than on a company’s server, it is much more difficult for a mobile bank account
holder to recoup from the damages. This poses serious questions about how vulnerable our
financial data is with us being reliant on our phones for storing important documents like our
paychecks and social security numbers.
The growth of mobile banking has caused serious concern for many traditional banks who are
now taking measures to decrease the demand for this type of service. Customers have several
options when it comes to banking; they can go to the local branch and wait in a long line or they
can go online and access their accounts on their phone's browser (Vives, 2019). One of the first
things that traditional banks did was take away features like check deposit and bill pay.
However, even with these features being taken away, customers would still rather use mobile
banking than go through the trouble of going to an actual bank. The banks then began taking
more drastic measures, like removing ATM privileges. This has led to customers going and
getting a second bank account to cover their mobile banking needs.
Although these changes have decreased the number of customers using mobile banking, it is still
growing quickly and with many more features on the horizon like Apple Pay and Google Wallet.
Traditional banks must learn from these new disruptive technologies and adjust their strategies
so that they are not left behind. Although a person cannot create or modify accounts without
going through a traditional bank, they can go ahead and link their checking account to their
phone's browser or download an app to save all of their information that way. This means that
traditional banks may find themselves losing customers to these new mobile banking models,
unless they can create their own. The biggest concern for customers is their personal information
being stored in their phones. Hackers could access critical information such as a customer's
social security number and bank account information through a person's cell phone, which could
cause serious damage (Gurme, 2019). In an article from the Christian Science Monitor, it was
stated that the financial industry is spending $1 million a day to protect against cybercrimes. A
study by Gartner reported that billions of dollars have already been lost to cybercriminals
because banks have not been developing ways to protect customers' money and data from being
stolen out of their phones.
References
Gurme, V. M. (2019). Issues & Challenges in Mobile Banking In Pune: A Customers’
Perspective.
Vives, X. (2019). Digital disruption in banking. Annual Review of Financial Economics, 11(1),
243-272.