According to Telstra's “Mobile Identity – The Fusion of Financial Services, Mobile and Identity” report, with smartphones now the primary channel used by Gen X and Gen Y to access and manage their finances, expectations around how financial institutions manage mobile identity have been transformed.

“For the last six months, we've spoken to consumers and banks all over the world, in an effort to understand how our relationship with our smartphone is affecting our relationship with our financial institutions,” Rocky Scopelliti, Global Industry Executive for Banking, Finance & Insurance, Telstra, said.

“What we uncovered is that when it comes to mobile banking applications, consumers no longer believe in just the safety of passwords and usernames. Instead, two-thirds of US consumers think that using biometrics – such as voice, fingerprint, iris and facial recognition – would be more secure and help reduce the risks of fraud,” he added.

According to the research, while factors such as interest rates and ease of accessing funds used to be the most important considerations when selecting a financial institution, today, more than half of U.S. consumers cite the security of their finances and personal information their top priority, together with their institutions' reputation for security.

Despite this, the report found that less than half of U.S. consumers were very satisfied with their institutions' authentication methods, with one third willing to pay an extra USD$17 per annum for more sophisticated mobile security measures.

“Our research shows consumers are using their mobile banking applications in some really cutting edge ways, so they're expecting much more than ever before from their financial services providers in terms of security, innovation and functionality. In fact, Gen X and Gen Y has become so dependent on their smartphones to access their financial services, that it's led to a behavioral state we are calling 'no-finapp-phobia' – the fear of being without financial applications,” he said.

Findings by Telstra were consistent with a report from Deloitte in which 72% of consumers said they would appreciate the use of biometric identification in banking (such as fingerprints or iris recognition) for device authentication in financial services transactions.

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