Fed Research Indicates Mobile Banking Has Stalled

by Tim Sloane 0

This article in NetBanker by Jim Bruene indicates several positive trends were reported in the Fed data regarding mobile banking and mobile payments:

“The Fed’s latest mobile banking/payments usage numbers (full text) were bouncing around the fintech blogosphere last week. Most observers noted the 6 percentage-point rise in mobile banking across all devices (from 33% to 39%, includes respondents with any mobile phone & bank account) and the 5-point increase in mobile payments (from 17% to 22%).”

The article then points out that mobile banking by smartphone users remained flat:

“Those trends were all upbeat. The only sour note was the flatline of mobile banking usage among smartphone owners. There has been virtually no change in the usage percentage over the past 24 months (52% in 2014, 51% in 2013, and 50% in 2012). Granted, the base of smartphone users has grown substantially during that time (71% of all mobile phone users in 2014, 61% in 2013, 52% in 2012), so the total NUMBER of users is growing at a nice clip.”

The rest of the article explores why mobile banking may fail to inspire usage:

“But I’m convinced that part of the problem is a flawed mobile banking UI/UX. In my case, despite being a smartphone addict, I use mobile banking sparingly, 2 or 3 times per year for most accounts. And often it’s just to see what’s new with the app. If I wasn’t in the business, I’m not sure I’d be an active mobile banking user at all. And that points to a problem for issuers, who increasingly must satisfy mobile users.

What is holding me back? It’s not security, the #1 reason given by non-users, because I believe mobile banking is significantly more secure. And it’s not because I forget about mobile banking or don’t want to be bothered. I’ve been a huge mobile app user/believer since the the iPhone app store appeared on the scene almost 7 years ago. I have used 8 to 10 apps every day and in the last week have opened at least 25”

The article identifies four potential reasons why smartphone users fail to adopt these mobile banking apps, including a tedious login procedure, a poor user interface, the lack of compelling data, and the lack of search within the data available.

The article finishes with the reasons mobile will ultimately win out:

The future: I am firmly in the mobile camp. Eventually, mobile usage completely subsumes the desktop. Traditional online banking can’t compete with a TouchID-enabled mobile experience, combined with integrated image capture, location awareness, better security and more. The only question is how long it takes to get there.”

Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group

Read the full report.

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