More and more people are using mobile devices for financial purposes, but the effects of that trend are not clear yet, a Federal Reserve official said at a Senate committee hearing on Thursday.
“The evolution of new technologies that enable consumers to conduct financial transactions using mobile devices has the potential to affect their financial lives in important but, as of yet, not fully known ways,” Sandra Braunstein, an official with the Federal Reserve System Board of Governors, told the Senate Banking Committee.
Mobile devices are quickly becoming a significant alternative to personal computers, but concerns over security, privacy, and other issues are often raised.
Braunstein cited a Fed survey, released on March 14, that found that one in five mobile phone users had used their phone to conduct banking.
In order to protect the privacy and security of people who use mobile payments and other banking options, some government oversight will be needed, said the committee’s chairman, Sen. Tim Johnson, D-S.D. “We need to make sure there are no gaps in the rules,” he said.
Consumers will need to be able to opt out of things like tracking and have access to details about exactly what information companies may collect from mobile-banking users, said Kenneth Montgomery, chief operating officer of the Federal Reserve Bank of Boston. As with many other Internet services, a collaborative effort by industry and government is the best way to ensure that consumers are protected and innovation is encouraged, he told the committee.