The Future of Mobile Banking: Recent Studies Suggest Mobile Banking is on the Rise

By Rex Vining - 01/12/2011 12:13:00

Two new studies from Oracle^[1] and Intuit Financial Services^[2] indicate growing consumer interest in mobile banking. According to Intuit's Fourth Annual Financial Management Survey^[2], 41% of respondents own smartphones, 23% use mobile banking, and another 17% plan to try it in 2012.

 

Oracle's study, which surveyed 3,000 mobile users from around the world, suggests that consumers are getting more comfortable downloading applications to their mobile devices. According to the study^[1], 55% of mobile users have downloaded a free app for their mobile phone in the past year (43% in the U.S.). And in the last three years, mobile users have downloaded more than 300,000 applications 10.9 billion times.^[1]    

 

Of the Intuit study^[2] respondents who use mobile and online solutions to manage their banking and finances, 65% access their accounts through the Internet, while another 28% us a mobile banking application. This statistic becomes even more interesting given that Intuit also reports^[2] an average increase in interaction of 45% when customers use both mobile and online banking solutions, as opposed to online alone.    

 

Which Features Matter?

 

The Intuit study^[2] provides some additional insight into which features are most wanted by mobile and online users. Among the respondents using mobile and online banking solutions:  

 

• 70% had a desire to see their complete financial picture in one location.

   

• 64% said that tracking account balances is the most important online feature.

   

• 34% indicated that paying bills is the most important online feature.

   

• 28% reported that transferring funds is the most important online feature.

   

• 6% use mobile devices to remotely deposit checks.

 

While Intuit's study focused on core banking features, the Oracle study^[1] sheds some light on other mobile commerce features that banks and financial service companies could get involved in. The Oracle study found that:

 

• 45% of mobile users say they have already chosen to share their location data with mobile apps in order to receive more relevant content (up 33% from the previous year).

   

• 30% of mobile users have comparison shopped using their mobile phones.

   

• 24% of mobile users have read customer reviews on their mobile devices.

   

• 14% of mobile users have scanned a quick response code.   

 

However, while both studies indicate a significant increase in mobile device usage, the Oracle survey results also showed little interest in mobile payments. Only 6% of those surveyed have made a purchase from a brick-and-mortar store using their mobile devices, as opposed to cash or credit card. This lack of interest in mobile payments is largely due to security concerns, as 68% of respondents believe that the information stored and transmitted by their phone isn't, or may not be, secure.   

 

Mobilizing the Youth

 

The Intuit study^[2] also reveals that 18 to 32-year-olds are three times more likely to use mobile banking than Gen X, baby boomers, and senior citizens. As younger consumers enter the market, this trend will likely continue.

 

Tablets Taking Over?  

 

While 70% of mobile users have smart phones^[1], making them the dominant device in the mobile space, the Oracle study^[1] highlights a growing demand for tablets and tablet banking apps. According to the study, 16% of mobile customers have purchased a tablet computer and another 41% plan to buy one in the next 12 months. With Amazon now offering their Kindle Fire at $199, the price seems to be right for a large-scale consumer migration into the tablet space.

 

When asked specifically which mobile device they would prefer when using banking and finance apps, 34% preferred a tablet computer, 11% chose a mobile phone, and the remaining 55% said both.^[1] Given that only 16% of customers have actually bought a tablet computer, this lopsided preference is quite surprising.  

 

Global Reach

 

Mobile communication providers are extending the global reach of mobile banking by providing access to financial tools for those living in underbanked and rural locations.^[3] These areas often don't have land lines.

 

In a recent report, Mobile Money Africa noted that 125% of the population of Botswana uses mobile phones (meaning some users have multiple phones), followed by South Africa with a mobile phone penetration rate of 105%, and Zimbabwe with a penetration rate of 66%.^[3]

 

Looking Forward

 

While there will always be a place for both traditional and online banking, it seems evident that more and more users are flocking to phones, tablets and other devices to conduct their banking. The question remains—to what extent will customers trade banking from the comfort of their home for banking from the convenience of their phone? 

 

References

 

[1] Crosman, Penny. "Consumers Want to Bank by Mobile Tablet: Survey." American Banker. 01 Nov. 2011. Web. 03 Nov. 2011. <http://www.americanbanker.com/issues/176_212/tablet-applications-mobile-banking-1043708-1.html>.

 

[2] "Have Phone, Will Bank." MarketWatch. 02 Nov. 2011. Web. 03 Nov. 2011. <http://www.marketwatch.com/story/have-phone-will-bank-2011-11-02>.

 

[3] "Mobile Banking an Innovation for Zimbabwe, the Standard Claims." Making Finance Work for Africa. 31 Oct. 2011. Web. 3 Nov. 2011. <http://www.mfw4a.org/news/news-details/2/mobile-banking-an-innovation-for-zimbabwe-the-standard-claims.html>.