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Consumers Readily Adopt New Mobile Banking Tools

Transacting is becoming common mobile banking activity

NEW YORK, NY (October 17, 2012)— As smartphone and tablet penetration continues to rise, so too does the use of mobile banking, bill paying, money transfer, remote check deposit and other personal money-management services, according to a new eMarketer report, “Bigger Money on the Small(er) Screen: How Smartphones and Tablets Change the Way Consumers Manage Their Finances.” On-the-go consumers are turning more frequently to their devices to keep tabs on their money and conduct increasingly complex financial transactions—simply because they can.

As both a complement to online money management and a unique channel in its own right, mobile is dramatically changing how people interact with their financial institutions. Banks, brokerages, credit card companies, payment processors and other financial providers that make it easy for their customers to do business via mobile have the potential to cultivate and retain loyal customers, create new revenue streams and gain long-term competitive advantage.

Recent research on the number of people in the US who use mobile banking—the most widely studied mobile financial service—has returned estimates in the range of 15% to 38%, depending on the population being studied and the research methodology. The actual percentage, however, is probably in the 21% to 23% range of US mobile phone users.

Alongside the rapid rise of smartphones—and tablets—mobile banking adoption will grow quickly. In June 2011, Javelin Strategy & Research found that US consumers’ use of mobile banking rose 63% between 2010 and 2011, from 35 million adults to 57 million. The firm further predicted 111 million mobile banking users—51% of total mobile phone users—by 2016.

Mobile banking has been steadily evolving from an informational channel to one in which consumers conduct a variety of transactions.

“First, online banking made a lot more information and data available to the end user,” said Michele Janes, senior business leader for global mobile products at Visa. “Then, on-the-go consumers became accustomed to receiving transaction alerts, accessing balance information, looking up receipts and doing other simple tasks from their phones. But now we’re seeing consumers take that behavior a step further and starting to transact.”

Results from the January 2012 Federal Reserve study support this evolution. While the most popular mobile banking activities were still checking up on account balances and recent transactions, it found significant use of the mobile channel for transactional activities, such as paying bills, transferring funds and depositing checks.

As banks and investment institutions offer more robust mobile banking technology and tools—including person-to-person transfer, mobile remote deposit capture and on-the-go trading capabilities—consumers have shown that they are ready and willing to quickly adopt these new offerings. Many of these consumers, especially those in the younger demographic, in fact, demand it.

The full report, “Bigger Money on the Small(er) Screen: How Smartphones and Tablets Change the Way Consumers Manage Their Finances,” also answers these key questions:

  • What finance-related activities are most popular on smartphones and tablets?
  • How are smartphones and tablets changing the way consumers manage their finances?
  • What’s next in the mobile space for banks, brokerages and other financial providers?

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Clark Fredricksen
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Posted on October 17, 2012.