compete financial services: mobile banking

Compete Financial Services

Mobile Banking

1 Compete Financial Services Mobile Banking

What You’ll Gain From This White Paper

This white paper provides an update of mobile financial service (FS) trends that

occurred during Q2 2011. We aim to provide you with a clear sense of what is

currently going on in the Mobile Banking landscape by examining key metrics

– derived from Compete’s panel of two million consumers – to evaluate and

benchmark how the industry is performing.

This paper is complemented by four other papers: Mobile Money, which examines

the mobile wallet landscape overall, and industry-specific papers on Mobile Credit

Cards, Mobile Investing, and Mobile Auto Insurance.

The data enclosed comes from Compete’s Mobile FS Intelligence Survey, our

quarterly survey of approximately 1,200 consumers to understand qualitative

sentiment on a variety of topics related to the mobile channel.


Mobile Banking Where Mobile Adoption in Banking Stands Today

In Q2 2011, 54% of bank account owners (checking and/or savings) were using a

mobile device (Smartphone or tablet) to manage their accounts or conduct banking

transactions. 38% of bank account owners used their phone or tablet to view their

account balance, making this service the most popular mobile banking service. The

next highest level of adoption was using a mobile device to transfer funds between

accounts or finding an ATM/banking center, which 25% of bank account owners

reported doing. Remote check cashing had the lowest adoption rate at 11%.

The high use of checking balances and making transfers suggests that consumers

are both consulting and managing their balances before making purchases as the

phone increasingly becomes part of the in-store shopping process. The services

least connected to the shopping process – making deposits and scheduling bill

payments – will likely have the slowest adoption rates since they lack the “urgency”

associated with in-store purchasing.

Current Use of Mobile Banking Services (Bank Account Owners, Q2 2011)

Services most directly

connected to shopping process

have highest adoption levels

Consumers are Consulting Bank Balances and Transferring on the Go

38% 25% 25% 22% 16% 11%

View AccountBalance

TransferMoney

FindATM/Bank

MakeBill Payment

CheckDeposit

Schedule Bill Payment


Current Awareness of Mobile Banking Services

Of key mobile banking services available on mobile devices, financial service

consumers are most familiar with basic transactions such as viewing account

balance, which has an awareness rate of 66%. Transferring funds between

accounts, using a phone to find an ATM, and making or scheduling a bill payment

have similar awareness rates, hovering around two-thirds. However, a large share

of banking consumers remain unaware of other services, like mobile check deposit.

One out of five consumers has never heard of remote check deposit and another

36% have heard of it, but know very little about it.

Current Likelihood of Adoption of Mobile Banking Services

The vast majority of banking consumers say they aren’t likely to start banking with

their mobile device in the next three months. In fact, two-thirds of checking and

savings account owners who aren’t currently using mobile banking say they aren’t

planning to start anytime soon. Just 7% of banking consumers indicated that they

would be very or extremely likely to start using their phone or tablet to make a bill

payment. And just 5% of banking consumers said they would be likely to start using

their mobile device to make a deposit. A lot has been made of the early growth in

mobile banking. Online banking paved the way for mobile banking, contributing

to early, high levels of adoption by consumers who were already banking online.

However, adoption rates will likely taper off as mobile banking tries to entice

consumers who aren’t online bankers.

Aware of Mobile Banking Services (blue)

Likely to Use Mobile Banking in Next 3 Months (green)(Deposit Account Owners, Q2 2011)

Consumers are familiar with basic

mobile services like checking

balances, but less familiar with other

services like remote check cashing

Consumers are Familiar With the Basics

66%

14%

View AccountBalance

61%TransferMoney

62%Find ATM/Bank

60%MakeBill Payment

44%CheckDeposit

7% 7% 6%

5%

55%ScheduleBill Payment

9%


Why Aren’t Consumers Going to Start Banking on Their Mobile Device?

Key barriers to mobile service adoption in financial services in aggregate include

concern about security as well as a general feeling that there just isn’t a need to

manage money on the go. However, when product owners are asked to share their

reasons for not adopting mobile banking specifically (as opposed to mobile credit

cards, auto insurance, investing) including viewing account balances and scheduling

bill payments, the most common reason for not adopting bank account mobile

services was slow wireless connection (52%). This reason outstripped lack of need

and security concerns.

Only 8% of bank account owners indicated use of laptop/desktop as reason for not adopting mobile

services, suggesting that mobile services complement rather than cannibalize online services.

Mobile Banking Doesn’t Compete with Online Banking; it Complements it

Reasons for Not Using Mobile Banking (Bank Account Owners, Q2 2011)

What consumers say about mobile

money in general is not consistent

across sub-industries

Top Reason for Not Adopting Mobile Banking: Slow Wireless Connection

52%

Wireless connectionon my mobile device is too slow

48%

I don’t needto do this

40%

I don’t trust the security of my mobile device

18%

I am concerned there will be fees

8%

I use my laptop/desktopto access my accounts

6%

I don’t have a data plan that will allow me to do this


Current Use of Apps

Checking and savings account owners download the most apps and use them

often. 36% of bank account owners have downloaded at least one bank account

mobile app; 7% have downloaded two or more apps for their bank account. 29%

of brokerage account owners have downloaded at least one deposit app on their

mobile device and 10% have downloaded two or more. Behind brokerage, 26%

of credit card consumers have downloaded at least one app. Just 13% of auto

insurance consumers have downloaded an auto insurance app.

Mobile apps have a higher impact in the banking industry than in other industries. App adoption is

also higher in banking than in other industries, suggesting that as app availability and adoption grow

so will impact on consideration, choice, and recommendation of financial service companies.

Mobile Apps Have Highest Impact on Consideration, Choice, and Recommendations within the Banking Industry

Number of Applications Downloaded (FS Account Owners, Q2 2011)

36% of bank account owners have

downloaded one or more mobile apps.

72% of bank account owners who

downloaded an app, use it weekly or

more frequently, with 31% of these

consumers using the banking app daily

Mobile Banking Apps Downloaded Most Often

MobileCredit Card

MobileInvesting

MobileBanking

19% 9% 2%16% 5% 5% 5% 3%

1 2 3 or more

28%


Mobile Banking Key Findings:

• Banking industry has the highest rate of mobile service adoption in financial

industries, much higher than credit cards, brokerage, and auto insurance.

• Awareness of mobile banking services is high, but likelihood to adopt

in next 3 months is low.

• Top reasons for not using mobile banking are slow wireless connection

and lack of need, followed by security concerns.

• Online banking paved the way for mobile banking contributing to early, high

levels of adoption. Adoption rates will likely taper as mobile banking tries to

entice consumers who aren’t current online bankers.

• The services most connected to the in-store shopping process – consulting

balances and transferring funds – have the highest adoption levels. Services

least connected to shopping – making a mobile check deposit and scheduling

bill payments – have the lowest level of use.

• Mobile banking does not cannibalize online banking; It complements it.


The Last Word… Implications and Recommendations for Mobile Banking Marketers

• Link mobile banking services to the shopping process whenever possible.

Services most directly connected to shopping have the highest adoption

rates, so using these touch points as a launch pad to drive awareness of

other services will fuel adoption, too.

• Continue to drive online banking awareness and adoption, since it is

complementary channel. Integrate mobile and online services in a two-screen

approach delivering a seamless consumer experience.

• Bridge the gap between awareness and adoption. Feature and promote mobile

banking services more prominently on Web properties and rollout video, ads,

and other online content to boost awareness levels for key services.

• Drive adoption by creating relevance and urgency with mobile offerings. Provide

enough incentive to get consumers to try out services. This can be done by

creating unique offers or loyalty programs in the mobile channel. Use existing

offline and online channels to promote benefits of cross-channel adoption.

• Use marketing messaging to address the number one barrier for mobile

banking adoption – slow wireless connection. To the extent possible, marketers

should develop content and partnerships to help consumers understand

causes and fixes for slow wireless. Emphasize security and the use case in

marketing messaging, as these are two of the top barriers to mobile banking

adoption.

• Link mobile ads to apps. Consumers are open to seeing relevant ads within

banking apps, which have a positive impact on consumer’s perception of FS

companies. Mobile ads have a higher clickthrough rate than desktop ads, but

they must be more noticeable.


Jennifer Johnston CanfieldSenior Associate, Financial Services [email protected]

Michael PerlmanManaging Director, Financial Services [email protected]

About Compete

Founded in 2000, and part of WPP/Kantar since 2008, Compete is passionate

about understanding consumers to inspire great marketing. We draw our data

from the industry’s largest integrated online consumer behavior and survey panel,

comprised of over 2 million opt-in participants. Compete has extensive expertise in

the automotive, consumer goods, financial services, media, mobile, online, retail,

telecom and travel markets. Strategic partnerships with the WPP/Kantar family of

companies enable marketing optimization and a more holistic view of consumers.

About Kantar Media

Established in more than 50 countries, Kantar Media helps clients master the world’s

multimedia momentum through analysis of print, radio, TV, internet, cinema, mobile,

social media, and outdoor worldwide. Kantar Media offers a full range of media

insights and audience measurement services. Kantar Media expertise includes

audience measurement, advertising expenditure, media evaluation, single source

market research, online analytics and social media listening. Drawing upon the

deepest expertise in the industry, Kantar Media tracks more than 3 million brands

and delivers insight to more than 22,000 customers worldwide.

Learn More

For more information about Compete’s role in advancing the online marketing

effectiveness in financial services, please contact:

compete financial services: mobile banking

Economy & Finance