Requested Report (Proposal)

Transmittal Letter

Dear CEO,

Enclosed is the report conducted on April, 2014 on the mobile and internet banking and why customers are losing confidence in this mode of banking. The main findings of the report are:

That around 50% of the customers using mobile and internet banking have lost trust in this mode of banking due to insecurity
Approximately 20% of the customers whom lose their money through internet transactions do so because they are ignorant about cyber crime and had no information on how to prevent it.
Around 60% of the customers also became victims of cyber crime by exposing their bank details to public cyber cafes.
Approximately 20% of the respondents reported having revealed their bank details to strangers through email.
To restore their confidence in internet banking, 60% of the participants mentioned necessary training on the security of internet banking should be conducted.
About 90% of the customers who lose their money through internet banking quit this mode of banking.
More than 50% of the respondents revealed they had not installed the necessary security features in their mobile phones to prevent cyber crime

The information provided in this report should be used in addressing the problem of mobile and internet banking that is faced by most customers in your bank. All the findings from the participants are quite valid because they have used internet banking and hence understand its challenges.

Recommendations on how to improve the security in internet and mobile banking have also been offered for your implementation. Kindly feel free to contact me for any clarification about this report and look forward to doing more projects with you in the future.

Regards,

Xxxxxxx

Table of Contents

Transmittal Letter………………………………………………………………………..2

Executive Summary………………………………………………………………………5

Introduction………………………………………………………………………………6

Problem Statement…………………………………………………………………….…6

Method Used…………………………………………………………………………..…6

Findings………………………………………………………………………………..…8

Analysis & Recommendations…………………………………………………………….9

Conclusion………………………………………………………………………………..10

References…………………………………………………………………………….….12

Executive Summary

This report aims to address the problem with mobile and internet banking and why customers are losing confidence on this mode of banking. At the beginning, the report offers a brief introduction on how the banking industry has been growing due to the introduction of internet and mobile banking. The main problem being dealt with in this paper is the lack of customer confidence in dealing with mobile and internet banking. In order to get the relevant data both primary and secondary sources of data were used. For the primary source, ten participants were interviewed through questionnaires while the secondary sources were books and journals. Upon data collection, the main findings in this paper indicate that customers had lost trust in mobile and internet banking due to insecurity. Furthermore, the study also reveals that most of the customers are ignorant about cyber crime and often give their personal bank details to strangers and hence encouraging cyber criminals to pursue them. According to this study, most of the customers who are affected by cyber crime tend to abandon internet banking instead of reporting the cases to their banks. Based on the findings, the paper offers some recommendations to improve mobile and internet banking. Banks are recommended to advise their clients about the importance of installing security software in their phones to curb cyber crime. Moreover, banks are advised to train their customers about cyber crime and to encourage them to always report suspicious bank transactions to the necessary authority.

Introduction

Banking industry has been growing rapidly in various parts of the world. Primarily, the growth in this industry is driven by the various economic factors that have been making people to develop a culture of saving. In essence, it is true that no one will be interested in saving if they did not have the money to save. With technology, it is possible to conduct bank transactions through mobile and internet. However, customers have been losing their confidence in using mobile and internet banking due to the many cases of bank fraud through cyber crime. This paper will address why mobile and internet banking is losing popularity and how customers can be convinced to continue using this mode of banking without fear.

Problem Statement

The problem addressed by this research is the lack of customer confidence in using mobile and internet banking. To address this problem, the research will analyze the various reasons that make customers fear mobile and internet banking. Moreover, the research will also address the approaches that can be used to encourage more customers to utilize this form of banking.

Method Used

The research conducted aimed to be exhaustive in the topic of research. In relation to this, there was a need to have enough information on this subject. Although there was enough information on the internet, it was paramount to decipher the sources that had practical solutions for mobile and internet banking. Since there was no time to conduct numerous personal interviews with people who have been exposed to this industry, data was also collected from secondary sources. However, for the findings to be more practical, ten bank customers were interviewed on the subject matter.

Random sampling method was utilized to select the ten participants who were interviewed for this research. To ensure that participants with usable information were selected, the research sample narrowed down to the participants who had bank accounts and had access to internet or mobile phones. Indeed, this needed to be done to make sure that the data provided was not biased in any way. Due to the limited number of participants, a questionnaire that had ten questions related to online and mobile banking was designed and sent to the customers through email.

However, an introduction and a consent letter were sent to all the participants informing them what the research was all about. Moreover, the participants were also informed of the confidentiality of their information and that it would only be used for this research. Once they received the letters, they were supposed to fill the consent form as a confirmation that they were taking part in the research on a voluntary basis. To have diversity in the information provided, all the participants selected for this research possessed bank accounts in different banks. Eventually, all the ten questionnaires were emailed back to the researcher once the participants had filled them.

Other than questionnaires, the researcher also used secondary sources to gather data related to the research topic. Most of these secondary sources of data included financial management books, and peer reviewed journals on Cybercrime. Secondary sources were used because they offered findings from other studies that were conducted by in various parts of the world. In addition, all the sources used were written by known scholars with vast skills on the banking industry and specifically on mobile and internet banking.

Most of the secondary sources were from the internet while some were retrieved from libraries. To determine their credibility, the sources had to be from known libraries, written by authentic scholars, and sourced from university websites. Since the idea of online and mobile banking is fairly recent, all the secondary sources used had to be current with the oldest publication date being 2007.

Findings

According to the questionnaires, 50% of the participants responded that they had lost trust with internet banking due to insecurity that would enable hackers to tamper with their bank accounts. When asked whether they had experienced any form of insecurity, 40% of the participants reported they had lost their money to hackers.

The findings further revealed that 20% of the participants who lost their money had fallen victims because of their ignorance about cyber crime. Actually, some of them completely had no information on how to prevent cyber crime. The remaining 60% of the participants who had been victims noted that they had either disclosed the security details of their bank accounts and had failed to log out from a public cyber. The findings also indicated that 20% of the participants, who had fallen victims of bank fraud, did so by responding to some suspicious emails and revealing their bank account details to strangers.

When asked on how their confidence in mobile and internet banking could be won, 60% of the respondents said that enough training about the security issues on internet banking should be done, 20% of the respondents said that banks need to improve the security of their sites, while 20% of them noted that customer service should be emphasized in internet banking.

According to findings by Grimmelman et al. (2007), more banking fraud occurred through the use of internet banking and had affected many unsuspecting customers. These authors further revealed that almost 90% of the customers, who had been victims of cyber crime or had lost their money from internet transactions, had opted to quit internet banking.

A study that was commissioned by Greg (2010) revealed that most of the victims of banking fraud through the internet had given their passwords and other banking details to strangers. Moreover, the author also notes that some of the victims did not bother to report the incidence to their banks but instead just decided to do away with internet banking. The reason for not reporting was because they believed it only happened because they were not cautious when handling their internet transactions.

According to Milhorn (2007), internet and mobile banking has become a target for cyber criminals who are always on the internet trying to use all the possible tactics to acquire bank account details from internet users. As reported in this book, most of the people who are exposed to cyber crime use their mobile phones to conduct their bank transactions through the internet. Clearly, it was also revealed that more than 50% of mobile users had not installed any security software in their phones and hence making them an easy target for cyber criminals.

Analysis & Recommendations

Based on the findings it is clear that cyber criminals target bank users and defraud them through internet. In addition, most of the people who access their banks through mobile internet have not installed any security features in their mobile phones. For this reason, banks should focus on advising their mobile customers to install some of the latest security software in their phones in order to reduce the chances of being victims of cyber crime.

In order to address the ignorance of cyber crime, banks need to create awareness to their account holders about cyber crime. This can be done by informing their clients that cyber crime is real and that it can be prevented if they take security precautions (Greg, 2010). One of the main approaches that can be used by banks is to send such information to the mobile phone of their clients. Indeed, this would be the most convenient method to create awareness to their clients and to encourage them to continue using internet banking.

Furthermore, banks should also encourage their customers to always report on any suspicious transactions in their accounts. To facilitate this, banks should establish a toll-free line where customers can specifically report cases of bank fraud through internet (Grimmelman et al., 2007). This is likely to help the banks to track down such transactions and come up with measures for preventing them. Moreover, banks should also advise their clients not to reveal their personal bank details to strangers and to always log out from their internet accounts.

Conclusion

Both questionnaires and secondary sources were used to get the relevant data on mobile and internet banking and how it can be made safe for the users. Internet security contributes greatly in enabling hackers to gain access to bank accounts of most of the internet users. This is mainly due to the fact that most of the internet users are ignorant about cyber crime and how to deal with it. It is paramount for banks to advise their clients to install the necessary security features in their mobile phones to prevent internet crime. Moreover, banks also need to create awareness to their customers about cyber crime if they have to continue using mobile and internet banking. It is also essential for the customers to be encouraged to always report any suspicious transactions in their bank accounts. If all the issue of cyber crime is amicably addressed, customers will gain confidence in mobile and internet banking.

References

Greg, G. (2010). The Digital Crime Tsunami. Digital Investigation, 7 (1), pp. 3-8.

Grimmelman, J., Katz, E., Kozlovski, L. & Wagman, S. (2007). Cyber crime: Digital Cops in a Networked Environment. New York: NYU Press.

Milhorn, H. (2007). Cybercrime: How to Avoid becoming a Victim. Boston: Universal Publishers.

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