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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 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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Mobile Banking & Payments:Consumer Behavior in 2011
Paul McAdam
Senior Vice President
Research & Thought Leadership
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
Profile of the survey respondent pool
Generation
4
Gen Y*
Gen X
Baby Boomer
Mature
Under $30K
$30K to
$60K
$60K to $90K
$90K to $125K
$125K +
Annual Household Income
Mean = 45 years Mean = $54,286
Source: FIS Enterprise Strategy, February 2011
Convergence driving penetration of mobile financial services
• Younger generations dominate
• Device improvements and additions facilitating mobile banking
• App proliferation allowing more consumers to access mobile banking
• Large banks are leading the way
• Satisfaction with mobile is increasing
• Mobile remote deposit and mobile payments will follow a similar adoption path
Devices Apps
Consumers
5
64%*
47%
22%
13%
Gen Y Gen X Baby Boomer
Mature
21%31%
54%66%
36%
37%
32%
26%43%*31%
14% 9%
Gen Y Gen X Baby Boomer Mature
A conventional mobile phone unequipped for Internet access
A conventional mobile phone equipped for Internet access
A smartphone
Gen Y is connected with mobile Internet devices
Source: FIS Enterprise Strategy, February 2011
Access Internet on Mobile Phone Frequently
(base = total sample)
Type of Mobile Phone Owned(base = total sample)
*Read as 43% of Gen Y own smartphones
*Read as 64% of Gen Y access the Internet on their mobile phones frequently6
50% of smartphone owners use mobile banking; they comprise 76% of current mobile adopters
Source: FIS Enterprise Strategy, February 2011
Penetration of Active Mobile Banking Mobile Phone Types among Mobile Banking Users(base = mobile banking users with Internet connection)
Conventional mobile phone with Internet access
24%
* Read as: 50% of smartphone owners use mobile banking
* Read as: 76% of mobile banking users use smartphones to access mobile banking
7
50%*
13%
Smartphone Conventional mobile phone with Internet
access
Smartphone
76%*
Mobile banking adoption is fueled by Gen Y and Gen X; 38% of Gen Y uses mobile banking
Source: FIS Enterprise Strategy, February 2011
How Accessed Financial Services Online during Past 30 Days(base = respondents who bank online)
8
38%*
5%3%
22%
3% 2%
5%
1% 0%3%
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
More than half of mobile banking users are Gen Y; Gen X utilization also strong
Source: FIS Enterprise Strategy, February 2011
Mobile phone owners, Smartphone owners and mobile banking users by generation
*Read as 56% of mobile banking users are in Gen Y9
26%
43%56%*
27%
31%
32%34%
14%
10%13% 9%2%
Mobile Phone Owners Smartphone Owners Mobile Banking Users
Mature
Baby Boomer
Gen X
Gen Y
Except for checking balances, fewer financial activities conducted via mobile phone than by computer
Source: FIS Enterprise Strategy, February 2011
Financial Activities in the Last 30 Days Done by Mobile Phone and by Computer(base = respondents who bank online through device)
*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
10
88%*
57%
34%
22%
29%
26%
16%
91%
84%
49%
28%
38%
41%
14%
Checked balances in checking / deposit account
Looked at checking / deposit transaction activity or monthly statements
Transferred funds between accounts at my bank
Accessed credit card or loan account information online
Checked loan / bill payment due dates
Transferred money from my account to another person or organization
Accessed / made transaction in investment accounts online
Mobile phone
Computer / laptop / netbook
Satisfaction with mobile banking has risen significantly
Source: FIS Enterprise Strategy, March 2010 and February 2011
Satisfaction with Accessing Bank Account with Mobile Phone
(Top 4 box on 11-point scale)
Satisfaction According to Primary Type of Mobile Banking Used(Top 4 box on 11-point scale)
*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
60%*
76%
2010 2011
79%*
70%
57%
88%85%
78%
Mobile banking app Text message Mobile Internet browser
2010 2011
11
70%*
57%
55%
49%
44%
41%
37%
28%
27%
23%
21%
20%
20%
20%
16%
15%
14%
14%
Games
Social Networking (e.g., Facebook, Twitter)
Entertainment / Music / Media & Video / Comics
News & Weather
Navigation
Communication (e.g., Gmail)
Banking
Sports
Photography
Shopping
Books & Reference
PayPal / other person-to-person payment app
Personalization / Live Wallpaper
Health / Fitness / Medical
Lifestyle
Travel
Business & Finance
Education
App proliferation supports mobile banking
Source: FIS Enterprise Strategy, February 2011
Penetration of Banking Apps among Those Who Have Downloaded Apps(base = mobile phone owners who downloaded any apps)
*Read as 70% of mobile phone owners who have downloaded apps have downloaded games
12
Banking apps are relatively popular among those who have downloaded apps, even among older generations
Source: FIS Enterprise Strategy, February 2011
Penetration of Banking Apps among Those Who Have Downloaded Apps(base = mobile phone owners who downloaded any apps)
*Read as 44% of those in Gen Y who have downloaded apps have downloaded banking apps
13
44%*
34%
26% 26%
Gen Y Gen X Baby Boomer Mature
The top-10 banks have higher awareness and are capturing significantly more than their fair share
Source: FIS Enterprise Strategy, February 2011
Where Mobile Banking Users Have Primary Checking Accounts
*Read as: The Top 10 banks capture 52% of mobile banking users
14
52% of mobile
banking users
vs. 37% of the
sample37%
52%*
13%
12%20%
10%
19%17%
10% 8%
Mobile Phone Owners Mobile Banking Users
Other FIs
Credit Unions
Community and Small Regional Banks
Banks 11 to 50
Top 10 Banks 50%*
29% 31%
13%
13%15%
15%
30%28%
18%24%
24%
4% 5% 2%
Yes No Don't know
Awareness of Whether their FI Offers Mobile
*Read as: 50% of mobile phone owners who are aware their FI offers mobile banking have their checking account with a top 10 bank
Satisfaction with mobile banking is higher among other FI’s and top 10 banks
Source: FIS Enterprise Strategy, February 2011
Satisfaction with Mobile Banking According to Type of Financial Institution(Top 4 box on 11-point scale)
*Read as: 82% of mobile banking who had their primary checking at one of the top 10 banks were satisfied with the experience
15
82%
66%
80%77%
87%
Top 10 Bank Banks 11 to 50 Community and Small Regional Banks
Credit Unions Other FIs
Avg. = 76%
Customer Characteristics
Mobile Deposit Capture
Mobile NFC Payments
The Path to Adoption
100%96%
15%
42%
23%*
99%
3%
13%
Mobile phone Computer / laptop / netbook
Tablet Internet gaming system
Mobile Banking Users Non-users
Mobile banking users are connecting to the Internet with a variety of devices
Source: FIS Enterprise Strategy, February 2011
How Mobile Banking Users vs. Non-users Connect to Internet(Base = total sample)
*Read as 23% of non-users of mobile banking connect to the Internet through their mobile phones
17
90%*
9%5%
99%
1% 1%
Computer / laptop / netbook
Tablet Internet gaming system
Mobile Banking Users Non-users
Mobile banking users are more likely to connect to banks via computer alternatives
Source: FIS Enterprise Strategy, February 2011
How Mobile Banking Users vs. Non-users Access Financial Services Online
(base = total sample)
How Mobile Banking Users vs. Non-users Pay Bills Online
(base = total sample)
*Read as 90% of mobile banking users access financial services online through computers
*Read as 86% of mobile banking users pay bills online through computers18
86%*
42%
8% 7%
80%
1% 1%
Computer / laptop / netbook
Mobile phone Tablet Internet gaming system
Mobile Banking Users Non-users
Mobile banking users trade paper for plastic
Source: FIS Enterprise Strategy, February 2011
2.8
4.5
3.3
3.2
4.5
12.3
3.2
3.4
3.4
4.3
4.4
15.3*
Direct Deposit
Wrote a paper check
Electronically transferred funds to another FI
Debit card cash back
Preauthorized bill pay
Debit card purchase
Mobile Banking Users
Non-users
Average Number of Transactions with Primary Checking Account in Past 30 Days
*Read as: mobile banking users made an average of 15.3 purchases with their debit cards in the past 30 days
19
Mobile banking users are more oriented toward accessing online financial services outside of conventional FI’s
Source: FIS Enterprise Strategy, February 2011
*Read as: 60% of mobile banking users make P2P payments
47%
1%
2%
4%
3%
3%
6%
45%
25%
7%
8%
11%
11%
16%
17%
60%*
None of these
Person-to-person lending sites (Prosper, Zopa, etc.)
Online lending sites (LendingTree, eLoan, etc.)
Online investment advice
Quicken Online
Personal financial management (e.g., Mint.com, Geezeo, Yodlee)
Personal savings (e.g., SmartyPig)
Person-to-person payments (e.g., PayPal)
Mobile Banking User
Non-user
20
Mobile banking users have higher asset balances than non users
Source: FIS Enterprise Strategy, February 2011
Mobile Banking Users Balance Indices vs. Balance Indices for Non Mobile Users (within Each Generation)
*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
128*
171
136
158180
196185
130
282
196177
151
Checking accounts Savings / MMDA / CD Brokerage or money market fund
company
Retirement / college savings
Gen Y Gen X Baby Boomer
21
Mobile banking users typically index above average for most credit and loan balances
Source: FIS Enterprise Strategy, February 2011
*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
122*
167
120139 147
158
126
236
167176
155173
5968
150
127
52
17
Majorcredit cards
Store-branded credit cards
Automobileloans
Educationalloans
Home equityloans
Other loans(not including
mortgages)
Gen Y Gen X Baby Boomer
22
Mobile Banking Users Balance Indices vs. Balance Indices for Non Mobile Users (within Each Generation)
Customer Characteristics
Mobile Deposit Capture
Mobile NFC Payments
The Path to Adoption
Lack of awareness and access impede remote deposit usage, but usage among smartphone owners is significant
Source: FIS Enterprise Strategy, February 2011
Yes 7%
Yes, but not available
for my mobile phone
6%
No22%
I don’t know60%*
No primary checking account
5%
Access to Mobile Remote Deposit Application at Primary Checking Account Provider
(base = all mobile phone owners)
*Read as: 60% of smartphone users don’t know if their bank has an app for remote deposit of checks
24
3%
12%*
59%
Among all mobile phone
owners
Among smartphone
owners
Among smartphone
mobile bankers
Use of Mobile Remote Deposit
*Read as: 12% of smartphone have used mobile remote deposit capture within the past 30 days
Mobile banking users are interested in remote deposit
Source: FIS Enterprise Strategy, February 2011
Reasons for Not Using Remote Deposit(base = have access but don’t use)
57%*
13%
Mobile Banking Users
Non-users
Mobile Banking Users Interested in Remote Deposit
(Top 2 box on 7-point scale)
*Read as: 57% of mobile banking users not currently using remote deposit are interested in remote deposit
25
31%*
29%
26%
20%
15%
8%
3%
I don’t think it is secure
Do not deposit enough checks to warrant having the application
Just haven’t gotten around to downloading the application
I want a printed receipt for checks I deposit
Do not have Internet access through my mobile phone
Takes too long for deposits to clear
My financial institution charges a fee for the service
*Read as: 31% of those able to use mobile remote deposit don’t use the service because they think it is not secure
Customer Characteristics
Mobile Deposit Capture
Mobile NFC Payments
The Path to Adoption
Mobile banking users likely on the forefront of NFC adoption
Source: FIS Enterprise Strategy, February 2011
Likelihood of Using Smartphone to Pay for Goods during Next Year if Available(base = smartphone owners)
21%*
26%27%
9%
4% 4%
9%7%
11%
21%
12%
9% 9%
31%
Extremely likely Very likely Somewhat likely Neither likely nor unlikely
Somewhat unlikely
Unlikely Very 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
27
Presence of readers, security concerns and comfort with existing payment methods are the primary NFC obstacles
28Source: FIS Enterprise Strategy, February 2011
Reasons That Would Prevent Smartphone Owners from Using It to Pay for Goods(base = smartphone owners)
13%
21%
10%
13%
12%
37%
16%
37%
35%
10%
13%
18%
21%
22%
24%
26%
39%
50%*
I only use my phone or other mobile device for calls and / or email
I don’t see the value in using it for payments
Would still have to carry loyalty cards
Would be too easy to lose track of how much I spend
Would still have to carry identification
I would rather use other payment methods I’m more comfortable with
Might not get points for using certain credit / debit cards
Would be less secure than other payment methods
Stores where I like to shop might not have readers
Mobile Banking Users
Non-Users
*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
NFC—advantages outweigh obstacles, especially among mobile banking users
Source: FIS Enterprise Strategy, February 2011
Benefits of Using Smartphones to Pay for Goods(base = smartphone owners)
32%
7%
11%
19%
20%
30%
27%
41%
10%
16%
21%
21%
34%
38%
39%
53%*
No benefits
Would be more secure than other payment methods
Would help me to better control my spending
Would not have to carry checkbook
Would help me keep track of my purchases
Would not have to carry cash
Would shorten time spent checking out at the register
Would not have to carry credit / debit cards
Mobile Banking Users
Non-users
*Read as: 53% of mobile banking users with smartphones perceive that not having to carry credit/debit cards is a benefit of NFC
29
Customer Characteristics
Mobile Deposit Capture
Mobile NFC Payments
The Path to Adoption
Plenty of runway ahead
31
• 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
Smartphone and tablet growth will continue to fuel mobile banking adoption
Source: The Nielsen Company Q2 Mobile Media Marketplace, 2010
U.S. Smartphone Penetration Projection(All Subscribers)
Mo
bile
Su
bsc
rib
ers
(M)
Percentage o
f Mo
bile Su
bscrib
ers (%)
26 33 37 41 45 49 52 58 63 70 76 83 91
17%19%
21%22%
24%27%
29%
32%35%
38%41%
45%
49%
0%
10%
20%
30%
40%
50%
60%
0
20
40
60
80
100
Q2 2009 Q2 2010 Q2 2011 Q2 2012
Smartphone Subscribers
U.S. Smartphone Penetration
32
24.1
35.139.8
42.3 44.0
10.3
26.0
50.7
67.7
76.1
82.1
2010 2011 2012 2013 2014 2015
Projected U.S. Tablet PC Sales and Users(All numbers in millions of US adults)
— Total Table PC Users (US)
Tablet PC Sales (US)
Source: Forrester Research eReader Forecast, 2010 – 2015 (US), January 2011
33
Lack of awareness impedes mobile banking penetration
Source: FIS Enterprise Strategy, February 2011
Yes49%
No7%
Don't know44%*
Primary Checking Account Providers Offering Mobile Banking(base = total sample)
*Read as: 44% of mobile phone users don’t know if their bank offers mobile banking
Disinterest among non-users continues due to a wide range of preferences and concerns
Source: FIS Enterprise Strategy, February 2011
Reasons for Not Using Mobile Banking(base = non-users)
*Read as: 38% of non-users would rather access their accounts online with their computers
38%*
28%
19%
19%
19%
16%
15%
3%
18%
I would rather access my accounts online with my computer
I don’t think it is secure
My mobile phone screen is too small
There is no charge to use my computer
I just haven't bothered to try mobile banking yet
There is no value to banking with my mobile phone
It costs too much to use the data plan on my mobile phone
I’ve tried accessing my bank account online with my mobile phone in the past, but was dissatisfied
No reason
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
Thank You Paul McAdam