The term “Mobile Banking” has grown in popularity in recent years, especially with the proliferation of cellular phones around the world. The term does not refer to specific technology, but instead is broadly used when discussing several different methods of using your mobile phone to perform various banking tasks, such as checking balances, transferring funds and making payments. Some mobile customers bank via text messaging, others by accessing their bank’s on-line banking web site via their Smartphone browser, and yet others by using bank-specific applications developed for the mobile phone. Whichever method is selected, the overall trend is the increasing popularity of mobile banking in all demographic groups.
At the end of 2012, a survey and report were prepared by the Consumer Research Section of the Federal Reserve Board’s Division of Consumer and Community Affairs, known as the DCCA. It was a follow-up to a similar study done the previous year. All findings indicate that Smartphones are becoming more and more ubiquitous in the U.S., and as a result, banking via Smartphone is on the rise. The reasons are obvious – portability and convenience make Smartphones a logical choice for keeping track of your finances. And more banks have apps available to mobile customers for a variety of devices, making it even more readily accessible and simple to navigate, even for novice users.
How many mobile owners utilize mobile banking?
87% of adults in the U.S. own a mobile phone, with 52% of those being internet-enabled; the technology referred to generically as Smartphones. Mobile phones that are not able to access the internet can bank via text message, but the survey reports that Smartphone users are much more likely to utilize banking applications than those with non-internet phones. 48% of Smartphone users have taken advantage of mobile banking, but the overall percentage of cell users banking by phone is just 28%. Even that number is on the rise, up from 21% at the end of 2011. Another 10% of cell phone users responded that they most likely would begin during 2013, indicating that the trend will continue. Of course the mobile phone has a wide variety of uses, with banking being far down on the list. It has been noted that even making phone calls is far less common on Smartphones than checking the time, browsing the internet and playing games.
What groups are most likely to bank by phone?
Younger mobile phone users are much more likely to adapt banking via their mobile than their older counterparts, with over 38% of those aged 18-29 banking on their phone versus just 8% of those over the age of 60.
The higher the household income, the more likely a person is to have banked via their phone, with those earning over $100,000 per year at a 28% usage rate compared with 16% for those earning less than $25,000.
Education also factors into banking on a mobile, with 37% of college graduates having banked by mobile phone while less than 6% of those without a high school education have done so.
What kind of banking do people do via their phones?
The study found that by far the most common banking task initiated via mobile phone was balance and transaction checking (87% of mobile banking customers), followed by the transfer of cash between accounts (53% of mobile bank users). On the rise is the usage of mobile devices to deposit checks, by utilizing a service such as Mobile Deposit, which allows bank customers who are Smartphone users to deposit a check into their account by taking a photo of each side of the check and submitting it to the bank via a Smartphone app. 21% of mobile banking users have utilized such a service.
Why don’t people use mobile banking?
Of those surveyed who did not utilize mobile banking, there were 2 common reasons why. The most frequent response was that other banking methods were more useful and convenient, and the customer could see no reason to start banking by phone. The second most cited reason was a concern for the security of their information and finances. In reality, mobile banking applications do offer a high degree of security, with data encryption, strict user authentication and connection limits. If in doubt about the security of your bank’s mobile application, visit their web site or contact a bank representative for additional details.
The Federal Reserve report is available for viewing on-line at the Federal Reserve web site for those interested in additional details. It does seem clear that the trend toward mobile banking is firmly implanted in our current culture, and will continue to expand as technology brings us even better security and fast, easy-to-use applications for managing finances. If you are a mobile phone user who doesn’t utilize mobile banking, contact your bank for details about their options and how to get started!