eMarketer Webinar: Financial Services 2015 Outlook—Mobile Comes into Focus

© 2014 eMarketer Inc.
Financial Services 2015 Outlook— Mobile Comes into Focus
Bryan Yeager
Analyst
November 12, 2014

Agenda
Consumer attention and activity are shifting to mobile
Financial marketers are ramping up mobile investments
Pushing toward an omnichannel future
Key takeaways
Twitter –#eMwebinar

Consumer Attentionand Activity Are Shifting to Mobile

Almost half of US adults’ media time is being spent with digital … … and almost half of time spent with digital media is on mobile

Mobile is pulling consumers away from the desktop

Digital banking is increasingly common in the US
By 2018, 6 in 10adults will be digital banking users

Mobile phone and tablet banking are quickly catching on among adults
74.5
93.3
106
37.6
47.1
54.8
2013
2014
2015
Mobile phone
Tablet
US Adult Mobile Banking Users, by Device (millions)
Source: eMarketer, Aug 2014

Major banks are drawing millions of customers to their mobile banking apps
16.1 million users
18.4 million users
13.7 million users
Source: company reports, Q3 2014

Result: Mobile is now the preferred banking channel for 1 in 10 US consumers
22% of US internet users access mobile banking at least once per week
31% of US mobile bankers access their mobile banking app at least once per day
Source: American Bankers Association, 2014; YouGov, Sep 2014; Bank of America/Braun Research, May 2014

Mobile banking will continue its growth trajectory9 in 10 USadult digital banking users will also be mobile banking users by the end of 2018

Smartphone bankers comprise the bulk of mobile banking usersHalf the US adult population is projected to use smartphone banking by 2018

Penetration is already strong among younger adults
The bulk of growth is coming from older adults moving off the sidelines

Key drivers for mobile banking usage growth:
Overall mobile device user growthand increasingly widespread mobile internet usageon these devices
More robust functionality, including mobile remote deposit capture, peer-to-peer payments, enhanced security measures, personal financial management tools and simplified user interfaces
Larger mobile device screen sizes will help consumers avoid transaction errors and improve interactions
Concerted marketing and advertising efforts by financial institutions to push customers to use mobile banking

Security and privacy concerns remain primary inhibitors to greater mobile banking usage
More than one-third of the US smartphone owners worried about insufficient wireless network security protection when accessing financial info
28% were concerned about losing their device or having it stolen

Despite a fragmented landscape, proximity mobile payments will grow aggressively in the US over the next five years

Mobile payment user growth is a key contributor to increasing transaction values through the forecast period

Larger purchases by more users will spur growth

Apple Pay brings hype, increased competition to mobile payments in the US
The announcement of Apple Pay on Sept. 9, 2014, generated a massive amount of media hype, which may help raise mobile payments consumer awareness.
The choice of using near field communication (NFC) for Apple Pay helps provide clarity to the marketin terms of technology standards.
Apple is competing with many existing platformsfrom other tech firms, mobile carriers, retailers and other payment providers.

Consumers are bullish on a mobile payments future
More than half of US internet users believe mobile payments will be widely used in the next five years
23.2% were certain about widespread adoption

Financial Marketers are Ramping Up Mobile Investments

62% ($3.9B): Spend dedicated to direct responseobjectives in 2014
35.5% ($2.2B): Spend dedicated to mobile advertising in 2014
Digital ad spending is rising

Mobile ad spending will outpace the desktop in 2016
$32.4
$31.7
$30.1
$26.9
$25.4
$24.2
$10.7
$19.0
$28.5
$40.2
$49.4
$58.8
2013
2014
2015
2016
2017
2018
Desktop
Mobile
US Digital Ad Spending (billions)
Source: eMarketer, Sep 2014

Users are increasingly coming across financial services ads on their mobile devices

Facebook advertising is efficient but requires testing to be effective
“ Facebook advertising is relatively cost efficient for us. I wouldn't say we've absolutely perfected it … We’re constantly testing messages, creative and new targeting options. It is a beautiful thing that you are able to overlay so many different factors and interests.”
—Alison Mittelstadt, head of digital marketing at Personal Capital

Financial services advertisers are dedicating more dollars to digital video

Mobile video gets consumers engaged
“ More money needs to roll into mobile from a video and a rich media perspective even faster. Every time we’re doing a lift study after a video campaign, we’re seeing that consumers are engaged.”
—Anthony Iacovone, founder and CEO of AdTheorent

Digital ad KPIs are also evolving as marketers become more sophisticated
“ A lot of companies are using basic media metrics to optimize their programs. Not every [acquired] account is going to drive the same value to their business … More sophisticated clients are starting to think about, as well as implement, value-based KPIs.”
—Gil Biegacz, director of category strategy for financial services at Rocket Fuel

Data-driven marketing is second nature to the new breed of financial startups
“ As a startup, we, by necessity, have to be extremely frugal and meticulous in tracking all of our spend and determining the value of all of our digital marketing efforts. To characterize the company as data-driven is really an understatement. We’re part ‘Mad Men’ and we’re part data geeks. We live and die by the numbers.”
—Alison Mittelstadt, head of digital marketing at Personal Capital

Pushing Toward An Omnichannel Future

Financial firms face competitive threats from growing tech companies

Banks’ biggest challenges include satisfying and retaining increasingly demanding customers

Mobile is an important innovation area in financial services to help meet user expectations

Breaking down marketing silos: Is talk becoming reality?
“ We’re starting to see some of the silos come down from a client’s perspective. Traditionally, financial firms are structured where they have a branding group and a direct response group … I think in 2015, we’re going to see more alignment to take a full-funnel approachto executing campaigns.”
—Gil Biegacz, director of category strategy for financial services at Rocket Fuel

Alignment with external partners is also critical
“ One of the things that we're going to do for the first time in our short life is hold an agency summit where we're going to bring together all of our external partners… We have some very ambitious conversion and growth goals for next year and we want to make sure that we're all aligned.”
—Alison Mittelstadt, head of digital marketing, Personal Capital

Making moves to stay innovative and transform
+
+
+

Banks are looking to online and in-branch innovations to deliver more customer value

Beacons can bridge the digital divide, bringing attribution to branch locations
“We’ve had conversations with a few firms about beacon technology within branch locations, so that when we serve an ad to a user, specifically on mobile, we can attribute that user to visiting a location and put those two things together. It’s all anonymized through hashed IDs between the two systems.”
—Anthony Iacovone, founder and CEO of AdTheorent

A variety of new mobile banking capabilities are planned for 2015

Delivering unified experiences can drive digital sales
“ Financial firms have to start connecting three experiences: the public site, the authenticated space and mobile apps. People are constantly bombarded with messages; you need consistency between the three if you are really going to drive sales.”
—Christopher Young, director of industry strategy for financial services at Adobe

Navy Federal Credit Union leverages its tablet apps for credit card account acquisition
“Consumers can learn about all the features that each of the various cards offer and then they can apply to get that card via their mobile device. We’re looking at expanding our acquisition pieces to offer a membership application probably early next year, as well as looking at consumer lending.”
—Meghan Gound, assistant vice president for e-channels at Navy Federal Credit Union

Customer experience is a powerful marketing vehicle
“ Our most effective marketing channel is the actual moment when the customer experiences us in our store or on our website. We put a lot of emphasis into the experience that the customer has because, at the end of the day, that experience is far more powerful than anything we can say.”
—Vinoo Vijay, CMO at TD Bank

Key takeaways
More consumer time spent with digital and mobile media is changing how consumers prefer to engage with financial institutions.
Mobile banking and mobile payments will reach key milestones in 2015.
Financial marketers are adapting their budgets, strategies and tactics for 2015 to reach consumers across digital touchpoints at the right time and context.
Firms are trying to perfect the omnichannel experience to fend off competition and meet heightened customer expectations.

Meet with eMarketer at NetFinance!
Contact Alexia Vlosky (avlosky@emarketer.com) or Bryan Yeager (byeager@emarketer.com) to schedule a meeting
December 2-4, 2014 –San Diego, CA

Planned Financial Services Topics for 2015
Digital Insurance Industry Trends
US Financial Services Industry 2015 Digital Ad Spending
Digital Video in Financial Services
Role of Digital in Loan Products
Role of Digital in Credit Card Products
Global Mobile Payment Trends
Updated Digital Banking + Mobile Payment Forecasts

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800-405-0844 or webinars@emarketer.com
Bryan Yeager
Financial Services 2015 Outlook—Mobile Comes into Focus
US Digital and Mobile Banking 2014: User Forecast, Key Trends and Marketing Opportunities
Global Digital Banking Trends 2014: Key Usage Metrics for 31 Countries
US Mobile Payments 2014: Updated Forecast and Key Trends Driving Growth
The US Financial Services Industry 2014: Digital Ad Spending Forecast and Trends

eMarketer Webinar: Financial Services 2015 Outlook—Mobile Comes into Focus

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eMarketer Webinar: Financial Services 2015 Outlook—Mobile Comes into Focus