CFPB Requests Information on Mobile Financial Services
The Consumer Financial Protection Bureau is inquiring about mobile financial services in an effort to create better security on mobile banking platforms and to reach out to unbanked consumers.
According to the CFPB, 74,000 customers a day used mobile banking last year to transfer money, check balances and make payments. The organization wants to make sure that a program with this much use is secured properly.
One of the CFPB’s main concerns lies in the ability for unbanked consumers to use this technology like their banked counterparts. A number of these consumers rely on check cashing facilities and payday loans, and the CFPB would like to see those options come to the mobile world.
“If you live in a poorer or more remote neighborhood, it can be hard to access the financial services you need,” said CFPB Director Richard Cordray. “The result is that underserved consumers tend to pay higher rates for services such as payday loans or check cashing.”
The Bureau also wants to use mobile technology to help people find banking locations better, which may improve their financial situations as a whole.
Mobile technology allows for real-time money management. A study from the Federal reserve found that 69% of mobile banking users check their balances on their phones before making large purchases. The CFPB wants information about how mobile products could help consumers manage their money in real time and make better spending decisions.
The CFPB is very concerned that data is protected on these mobile devices. The group wants to insure that privacy is maintained and data breaches are avoided. With these efforts, mobile banking could see some additional security features in the future.