According to a recent survey by Bankrate, 63% of smartphone users use at least one financial app from either traditional banks or fintechs including 55% who have at least one mobile banking app from a full service bank and 40% who use a peer-to-peer payments app. While Millennials (64%) are more likely than older adults (41%) to use a mobile banking app from a full service bank, mobile banking use is extending to older generations. Regular use of mobile banking apps can help consumers better understand their financial health, budget more effectively and see very quickly how much money they have and where it is going to avoid overdrafts or pay bills on time before incurring late fees. But, they say mobile banking is reaching a plateau with not much growth in the user base.
“The overall share of banking customers adopting mobile has plateaued, and one of the reasons that is the case is that until the last two or three years mobile banking has been essentially mobile customer support,” Bose says. “But increasingly, the more progressive institutions are adding more functionality over and above what is offered on other channels.”
Mobile banking is becoming more than purely convenient, but a preferred way to bank for many consumers according to Mercator Advisory Group’s CustomerMonitor Survey Series consumer research, though our latest research suggests that preference for smartphone as a platform for banking has indeed stayed the same as in 2016 after steady growth since 2013 when we first tracked this preference. In 2017, 26% of consumers prefer to use a smartphone to conduct electronic banking transactions, especially millennials, 40% of whom prefer to use their smartphones to make bank transactions. Yet, accessing a mobile banking app using their smartphone continues to be the fastest growing method of communication with consumers’ financial institution, used by nearly half of consumers who have an account with a financial institution. Concerns about security of mobile banking continues to be the top reason for not using mobile banking followed by my usual ways of banking work fine. Education on features and security of mobile banking will clearly help motivate consumers overcome their fears of mobile banking.
In Mercator Advisory Group’s upcoming report on Small Business Banking, Business Banking Services: Keeping Up With Millennial Owners, expected to be published in February 2018, 21% of owners of small businesses with annual revenues of $500,000 to $5 million that accept payment cards go to the branch of their primary business bank to get help with mobile and online banking, and millennial owners are no more likely than older owners to do so.
For more information on the Mercator Advisory Group CustomerMonitor Survey Series reports, please go to www.mercatoradvisorygroup.com/PrimaryData.
Overview by Karen Augustine, Manager, Primary Data Services at Mercator Advisory Group
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