The survey, Consumers and Mobile Financial Services, was released Wednesday. Inside, the report gauges the growth of mobile banking and concludes it’s definitely shifting into higher gear.
The Fed pulled together all the survey numbers, did some calculations, and now concludes that at least one in three American banking customers who own a smartphone will engage in mobile banking by 2013.
The good news for banks – and for bank customers who want to conduct their financial business via mobile phones – is that the mobile banking industry hasn’t even hit the halfway point in terms of “critical mass.” The Pew Research Center says that 35% of U.S. adults owned a smartphone as of May 2011, leaving plenty of room for growth in the market going forward.
But it’s the demographic data that really resonates. According to the Fed, Americans between the ages of 18 and 29 account for about 44% of all mobile banking users, while U.S. adults 60 and older only account for 6% of all users.That in itself isn’t a surprise – younger consumers are usually first in line when using new technologies. But what may be an eye-opener for banks is the fact that the traditionally “under banked” are trending ahead of the rest of the population in terms of mobile banking usage. The Fed report says that 29% of consumers who use check-cashing services and/or payday lenders used mobile banking in the past year.
By and large, consumers use their cellphones to check bank account balances or track recent transactions. Fewer consumers, the Fed reports, use mobile banking to actually pay bills or deposit a check via their phones.
What may be keeping a lid on growth is a general distrust among consumers about security effectiveness of mobile banking. The Fed report says that survey respondents were “more likely” to say that mobile banking was “unsecure” or “didn’t know” how secure the technology may actually be.