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Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
Mobile Banking & Payments: Consumer Behavior in 2011
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Mobile Banking & Payments: Consumer Behavior in 2011

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Better technologies for mobile devices, proliferation of banking apps and increased consumer appetite for staying connected are converging to propel mobile banking penetration. On the technology …

Better technologies for mobile devices, proliferation of banking apps and increased consumer appetite for staying connected are converging to propel mobile banking penetration. On the technology device front, recent double-digit growth in smartphone adoption has enabled consumers to expand the activities they can perform via mobile phone connections — including banking online. One-half of smartphone owners have banked online with their mobile phones within the past 30 days vs. only 13 percent of those with conventional mobile phones with Internet access.

More than one-quarter of U.S. smartphone owners indicate they would be “extremely likely” or “very likely” to use mobile payment during the next year if new technology was available that enabled payment through a contactless reader at point-of-sale. That translates into an estimated 17 million plus consumers who are prepared to exchange their cash-and-card-laden wallets for a different payment method. Smartphone owners who are likely adopters of mobile payments differ in significant ways the general population of smartphone owners.

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  1. Mobile Banking & Payments: Consumer Behavior in 2011 Paul McAdam Senior Vice President Research & Thought Leadership
  2. Research objectives and methodology• Study Objective: – Determine the impact of mobile devices on behaviors related to financial transactions • Accessing accounts • Paying bills • Depositing checks • Making purchases• Methodology: – 60 question online survey of 4,000 adults who own mobile phones – Split evenly by gender – Conducted in February 2011 – Sample provided by Survey Sample International 3
  3. Profile of the survey respondent pool Generation Annual Household Income $90K to $125K + $125K Mature Under Gen Y* $30K $60K to Baby $90K Boomer Gen X $30K to $60K Mean = 45 years Mean = $54,286 Source: FIS Enterprise Strategy, February 2011 4
  4. Convergence driving penetration of mobile financial services• Younger generations dominate• Device improvements and additions facilitating mobile banking• App proliferation allowing more Consumers consumers to access mobile banking• Large banks are leading the way• Satisfaction with mobile is Devices Apps increasing• Mobile remote deposit and mobile payments will follow a similar adoption path 5
  5. Gen Y is connected with mobile Internet devices Type of Mobile Phone Owned Access Internet on Mobile Phone (base = total sample) Frequently (base = total sample) 14% 9% 31% 43%* 26% 64%* 32% 47% 37% 36% 66% 22% 54% 13% 31% 21% Gen Y Gen X Baby Boomer Mature Gen Y Gen X Baby Mature Boomer A conventional mobile phone unequipped for Internet access A conventional mobile phone equipped for Internet access A smartphone *Read as 43% of Gen Y own smartphones *Read as 64% of Gen Y access the Internet on their mobile phones frequently Source: FIS Enterprise Strategy, February 2011 6
  6. 50% of smartphone owners use mobile banking;they comprise 76% of current mobile adoptersPenetration of Active Mobile Banking Mobile Phone Types among Mobile Banking Users (base = mobile banking users with Internet connection) 50%* Conventional mobile phone with Internet access 24% 13% Smartphone 76%* Smartphone Conventional mobile phone with Internet access * Read as: 50% of smartphone owners use mobile banking * Read as: 76% of mobile banking users use smartphones to access mobile banking Source: FIS Enterprise Strategy, February 2011 7
  7. Mobile banking adoption is fueled by Gen Y and Gen X;38% of Gen Y uses mobile banking How Accessed Financial Services Online during Past 30 Days (base = respondents who bank online) 38%* 22% 5% 5% 3% 3% 3% 2% 1% 0% 0% 0% Mobile phone Tablet Internet gaming system Gen Y Gen X Baby Boomer Mature * Read as: 38% of Gen Y accessed online banking via their mobile phone during the past 30 days Source: FIS Enterprise Strategy, February 2011 8
  8. More than half of mobile banking users are Gen Y;Gen X utilization also strong Mobile phone owners, Smartphone owners and mobile banking users by generation 2% 13% 9% 10% Mature 14% 32% Baby Boomer 34% 31% Gen X 27% Gen Y 56%* 43% 26% Mobile Phone Owners Smartphone Owners Mobile Banking Users *Read as 56% of mobile banking users are in Gen Y Source: FIS Enterprise Strategy, February 2011 9
  9. Except for checking balances, fewer financial activities conducted via mobile phone than by computer Financial Activities in the Last 30 Days Done by Mobile Phone and by Computer (base = respondents who bank online through device) 88%* Checked balances in checking / deposit account 91% Looked at checking / deposit transaction activity or 57% monthly statements 84% 34% Transferred funds between accounts at my bank 49% 22% Accessed credit card or loan account information online 28% Mobile phone 29% Checked loan / bill payment due dates Computer / laptop / netbook 38%Transferred money from my account to another person or 26% organization 41% Accessed / made transaction in investment accounts 16% online 14% *Read as: 88% of consumers banking online through their mobile phones checked their balances in their checking/deposit account with their mobile phone in the last 30 days Source: FIS Enterprise Strategy, February 2011 10
  10. Satisfaction with mobile banking has risen significantlySatisfaction with Accessing Bank Satisfaction According to Primary Type of Account with Mobile Phone Mobile Banking Used (Top 4 box on 11-point scale) (Top 4 box on 11-point scale) 88% 85% 76% 79%* 78% 70% 60%* 57% 2010 2011 Mobile banking app Text message Mobile Internet browser 2010 2011 *Read as: 60% of mobile banking users in 2010 were satisfied with the experience *Read as: 79% of mobile banking users who used mobile banking apps to connect with their FIs in 2010 were satisfied with the experience 11 Source: FIS Enterprise Strategy, March 2010 and February 2011
  11. App proliferation supports mobile banking Penetration of Banking Apps among Those Who Have Downloaded Apps (base = mobile phone owners who downloaded any apps) Games 70%* Social Networking (e.g., Facebook, Twitter) 57% Entertainment / Music / Media & Video / Comics 55% News & Weather 49% Navigation 44% Communication (e.g., Gmail) 41% Banking 37% Sports 28% Photography 27% Shopping 23% Books & Reference 21% PayPal / other person-to-person payment app 20% Personalization / Live Wallpaper 20% Health / Fitness / Medical 20% Lifestyle 16% Travel 15% Business & Finance 14% Education 14% *Read as 70% of mobile phone owners who have downloaded apps have downloaded games Source: FIS Enterprise Strategy, February 2011 12
  12. Banking apps are relatively popular among those who havedownloaded apps, even among older generations Penetration of Banking Apps among Those Who Have Downloaded Apps (base = mobile phone owners who downloaded any apps) 44%* 34% 26% 26% Gen Y Gen X Baby Boomer Mature *Read as 44% of those in Gen Y who have downloaded apps have downloaded banking apps Source: FIS Enterprise Strategy, February 2011 13
  13. The top-10 banks have higher awareness and are capturing significantly more than their fair share Where Mobile Banking Users Have Awareness of Whether their FI Offers Mobile Primary Checking Accounts 4% 5% 2% 8% Other FIs 10% 18% 24% 17% 24% 19% Credit Unions 10% 15% 20% Community and 28% 12% 13% Small Regional Banks 30% 13% Banks 11 to 50 15% 13% 52% of mobile 52%* Top 10 Banks 50%* banking users 37% vs. 37% of the sample 29% 31%Mobile Phone Owners Mobile Banking Users Yes No Dont know *Read as: The Top 10 banks capture 52% of mobile banking users *Read as: 50% of mobile phone owners who are aware their FI offers mobile banking have their checking account with a top 10 bank Source: FIS Enterprise Strategy, February 2011 14
  14. Satisfaction with mobile banking is higher among other FI’sand top 10 banks Satisfaction with Mobile Banking According to Type of Financial Institution (Top 4 box on 11-point scale) 87% 82% 80% 77% Avg. = 76% 66% Top 10 Bank Banks 11 to 50 Community and Small Credit Unions Other FIs Regional Banks *Read as: 82% of mobile banking who had their primary checking at one of the top 10 banks were satisfied with the experience Source: FIS Enterprise Strategy, February 2011 15
  15. Customer CharacteristicsMobile Deposit CaptureMobile NFC PaymentsThe Path to Adoption
  16. Mobile banking users are connecting to the Internet witha variety of devices How Mobile Banking Users vs. Non-users Connect to Internet (Base = total sample) 100% 99% 96% 42% 23%* 15% 13% 3% Mobile phone Computer / laptop / Tablet Internet gaming system netbook Mobile Banking Users Non-users *Read as 23% of non-users of mobile banking connect to the Internet through their mobile phones Source: FIS Enterprise Strategy, February 2011 17
  17. Mobile banking users are more likely to connect to banks viacomputer alternativesHow Mobile Banking Users vs. Non-users How Mobile Banking Users vs. Non-users Access Financial Services Online Pay Bills Online (base = total sample) (base = total sample) 86%* 80% 99% 90%* 42% 9% 8% 7% 5% 1% 1% 1% 1% Computer / Tablet Internet gaming Computer / Mobile phone Tablet Internetlaptop / netbook system laptop / gaming system netbook Mobile Banking Users Non-users Mobile Banking Users Non-users *Read as 90% of mobile banking users access financial services online through computers *Read as 86% of mobile banking users pay bills online through computers Source: FIS Enterprise Strategy, February 2011 18
  18. Mobile banking users trade paper for plastic Average Number of Transactions with Primary Checking Account in Past 30 Days 15.3* Debit card purchase 12.3 4.4 Preauthorized bill pay 4.5 4.3 Debit card cash back 3.2 Mobile Banking Users 3.4 Electronically transferred funds to another FI 3.3 Non-users 3.4 Wrote a paper check 4.5 3.2 Direct Deposit 2.8 *Read as: mobile banking users made an average of 15.3 purchases with their debit cards in the past 30 days Source: FIS Enterprise Strategy, February 2011 19
  19. Mobile banking users are more oriented toward accessingonline financial services outside of conventional FI’s 60%*Person-to-person payments (e.g., PayPal) 45% 17% Personal savings (e.g., SmartyPig) 6% Personal financial management (e.g., 16% Mint.com, Geezeo, Yodlee) 3% 11% Mobile Banking User Quicken Online 3% Non-user 11% Online investment advice 4%Online lending sites (LendingTree, eLoan, 8% etc.) 2% Person-to-person lending sites (Prosper, 7% Zopa, etc.) 1% 25% None of these 47% *Read as: 60% of mobile banking users make P2P payments Source: FIS Enterprise Strategy, February 2011 20
  20. Mobile banking users have higher asset balancesthan non users Mobile Banking Users Balance Indices vs. Balance Indices for Non Mobile Users (within Each Generation) 282 196 196 180 185 177 171 158 151 128* 136 130 Checking accounts Savings / MMDA / CD Brokerage or Retirement / money market fund college savings company Gen Y Gen X Baby Boomer *Read as: Indexed as 100 equals average for the segment. Gen Y mobile banking users have 28% more money in their checking accounts that mobile phone owners who have not adopted mobile banking Source: FIS Enterprise Strategy, February 2011 21
  21. Mobile banking users typically index above average for mostcredit and loan balances Mobile Banking Users Balance Indices vs. Balance Indices for Non Mobile Users (within Each Generation) 236 176 173 167 167 150 155 158 139 147122* 126 120 127 68 59 52 17 Major Store-branded Automobile Educational Home equity Other loans credit cards credit cards loans loans loans (not including mortgages) Gen Y Gen X Baby Boomer *Read as: Indexed as 100 equals average for the segment. Gen Y mobile banking users have 22% more in major credit card balances than Gen Y consumers who have not adopted mobile banking Source: FIS Enterprise Strategy, February 2011 22
  22. Customer CharacteristicsMobile Deposit CaptureMobile NFC PaymentsThe Path to Adoption
  23. Lack of awareness and access impede remote deposit usage,but usage among smartphone owners is significantAccess to Mobile Remote Deposit Application at Use of Mobile Remote Deposit Primary Checking Account Provider (base = all mobile phone owners)No primary Yes, but not 59% checking available account for my 5% mobile Yes phone 7% 6% No 22% I don’t 12%* know 60%* 3% Among all Among Among mobile phone smartphone smartphone owners owners mobile bankers *Read as: 60% of smartphone users don’t know if their bank has an app for remote deposit of checks *Read as: 12% of smartphone have used mobile remote deposit capture within the past 30 days Source: FIS Enterprise Strategy, February 2011 24
  24. Mobile banking users are interested in remote depositMobile Banking Users Interested Reasons for Not Using Remote Deposit in Remote Deposit (base = have access but don’t use) (Top 2 box on 7-point scale) I don’t think it is secure 31%* 57%* Do not deposit enough checks to 29% warrant having the application Just haven’t gotten around to 26% downloading the application I want a printed receipt for checks I 20% deposit Do not have Internet access through 13% 15% my mobile phone Takes too long for deposits to clear 8% Mobile Banking Non-users My financial institution charges a fee Users 3% for the service *Read as: 57% of mobile banking users not currently using remote deposit are interested in remote deposit *Read as: 31% of those able to use mobile remote deposit don’t use the service because they think it is not secure Source: FIS Enterprise Strategy, February 2011 25
  25. Customer CharacteristicsMobile Deposit CaptureMobile NFC PaymentsThe Path to Adoption
  26. Mobile banking users likely on the forefront of NFC adoption Likelihood of Using Smartphone to Pay for Goods during Next Year if Available (base = smartphone owners) 31% 27% 26% 21%* 21% 11% 12% 9% 9% 9% 9% 7% 4% 4%Extremely likely Very likely Somewhat likely Neither likely nor Somewhat Unlikely Very unlikely unlikely unlikely Mobile Banking User Non-user *Read as: 21% of mobile banking users with smartphones are interested extremely likely to use them to pay for goods in the next year if NFC is available Source: FIS Enterprise Strategy, February 2011 27
  27. Presence of readers, security concerns and comfort withexisting payment methods are the primary NFC obstacles Reasons That Would Prevent Smartphone Owners from Using It to Pay for Goods (base = smartphone owners) Stores where I like to shop might not have readers 50%* 35% Would be less secure than other payment methods 39% 37% Might not get points for using certain credit / debit cards 26% 16% I would rather use other payment methods I’m more 24% comfortable with 37% Would still have to carry identification 22% 12% Would be too easy to lose track of how much I spend 21% 13% Mobile Banking Users Would still have to carry loyalty cards 18% 10% Non-Users I don’t see the value in using it for payments 13% 21% I only use my phone or other mobile device for calls and / or 10% email 13% *Read as: 50% of mobile banking users with smartphones perceive that the lack of readers in stores where they like to shop could prevent them from using NFC 28 Source: FIS Enterprise Strategy, February 2011
  28. NFC—advantages outweigh obstacles, especially among mobile banking users Benefits of Using Smartphones to Pay for Goods (base = smartphone owners)Would not have to carry credit / debit cards 53%* 41% Would shorten time spent checking out at 39% the register 27% Would not have to carry cash 38% 30%Would help me keep track of my purchases 34% 20% Would not have to carry checkbook 21% Mobile Banking Users 19% Would help me to better control my 21% Non-users spending 11%Would be more secure than other payment 16% methods 7% No benefits 10% 32% *Read as: 53% of mobile banking users with smartphones perceive that not having to carry credit/debit cards is a benefit of NFC Source: FIS Enterprise Strategy, February 2011 29
  29. Customer CharacteristicsMobile Deposit CaptureMobile NFC PaymentsThe Path to Adoption
  30. Plenty of runway ahead• Continued smartphone and tablet adoption will fuel growth• Creating awareness of accessibility to the financial institution via mobile phone• Persuading customers who are connected to their FIs online to try mobile banking• Providing a satisfying user experience for early and late majority customers, to encourage move from trial to adoption 31
  31. Smartphone and tablet growth will continue to fuel mobile banking adoption U.S. Smartphone Penetration Projection Projected U.S. Tablet PC Sales and Users (All Subscribers) (All numbers in millions of US adults) 100 60% 82.1 Percentage of Mobile Subscribers (%) 49% 76.1 45% 50% 67.7 80 41%Mobile Subscribers (M) 38% 35% 40% 50.7 32% 60 29% 27% 24% 30% 22% 42.3 44.0 21% 39.8 40 19% 26.0 35.1 17% 20% 24.1 20 10.3 10% 26 33 37 41 45 49 52 58 63 70 76 83 91 0 0% Q2 2009 Q2 2010 Q2 2011 Q2 2012 2010 2011 2012 2013 2014 2015 Smartphone Subscribers — Total Table PC Users (US) U.S. Smartphone Penetration Tablet PC Sales (US) Source: The Nielsen Company Q2 Mobile Media Marketplace, 2010 Source: Forrester Research eReader Forecast, 2010 – 2015 (US), January 2011 32
  32. Lack of awareness impedes mobile banking penetration Primary Checking Account Providers Offering Mobile Banking (base = total sample) Yes Dont know 49% 44%* No 7% *Read as: 44% of mobile phone users don’t know if their bank offers mobile banking Source: FIS Enterprise Strategy, February 2011 33
  33. Disinterest among non-users continues due to a wide range of preferences and concerns Reasons for Not Using Mobile Banking (base = non-users) I would rather access my accounts online with my computer 38%* I don’t think it is secure 28% My mobile phone screen is too small 19% There is no charge to use my computer 19% I just havent bothered to try mobile banking yet 19% There is no value to banking with my mobile phone 16% It costs too much to use the data plan on my mobile phone 15%I’ve tried accessing my bank account online with my mobile phone 3% in the past, but was dissatisfied No reason 18% *Read as: 38% of non-users would rather access their accounts online with their computers Source: FIS Enterprise Strategy, February 2011 34
  34. Mobile banking opportunity• Moving quickly from early adopters to early majority• Adoption will continue to grow as smartphone and tablet ownership expands• Gen Y and X are the primary adopters today• Mobile is vital to secure their relationships as they move into nesting lifestage – Mobile apps the price of entry for attracting younger customers – Higher deposit and loan balances than their non-adopter generational counterparts – More likely us use debit card, less likely to write checks – Accessing financial services online via other Internet devices – Most aggressive users of non-traditional financial services (P2P, PFM, etc.) – Most likely to use mobile remote deposit and mobile NFC payments• Easy-to-use mobile banking apps key to increasing penetration among desirable Baby Boomer segments 35
  35. Thank YouPaul McAdamPaul.McAdam@fisglobal.com

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