Abstract
Overview
Banks and credit unions have a positive outlook ahead for mobile banking: Javelin research forecasts that availability and adoption is set to surge through 2012. But what strategic value can financial institutions expect to derive from investments in the mobile channel? This report highlights the near term and future benefits provided by the mobile channel, outlines which consumers should be given access to mobile banking to achieve those benefits, and demonstrates how mobile channel usage positively affects the adoption of mobile contactless payments.
Primary Questions
- How many consumers will have access to the mobile channel for banking transactions and alerts through 2012, and how many of them will adopt?
- What is the strategic value of offering the mobile channel in the near term and in the future?
- Why must banks and credit unions look beyond online bankers when offering mobile banking?
- How will mobile banking influence the successful adoption of mobile contactless payments?
Findings and Analysis
Availability of the mobile channel to end users and consumer adoption of mobile services is set for exponential growth, arriving at 108 million users in 2012. Currently, the majority of US banks make the mobile channel available to online banking customers only, which Javelin data shows is a missed customer service opportunity and a disservice to non-online bankers who demonstrate similar likelihood to use mobile banking compared to online bankers. Javelin views mobile payments as the first direct revenue opportunity financial institutions will obtain through the mobile channel. However, banks and credit unions will only begin to reap the rewards of revenue associated with mobile payments if they are able to establish adoption of mobile banking for other banking transactions first. Financial institutions must expand their mobile offerings by 2010 to ensure that they do not miss the opportunity to build mobile relationships now and set the stage for mobile payments in the years to come.
Audience:
- Financial Institutions: Online banking/eCommerce, mobile banking,marketing, channel strategists;
- Vendors: Mobile banking platform providers, online banking platform providers, mobile phone carriers
Methodology
Mobile forecast was based on consumer usage and attitude data collected in a random online sample in February 2007 (n=2,230) and in October 2007 (n=2,192), as well as executive surveys (conducted both by phone and online) of 26 financial institutions in December 2007. The consumer surveys targeted respondents based on representative proportions of gender, age and income as compared to the overall US online population. Secondary data from public sources such as the US Census Bureau and the Bureau of Labor Statistics forms part of the projections. This report is based on data collected online from a random-sample panel of 2,230 respondents in February 2007 and 2,192 respondents in October 2007. Consumer survey data used is nationally representative of US adults online based on age, gender and income. Overall margin of sampling error for the consumer survey is ±2.96 percentage points at the 95% confidence level.
Table of Contents
OVERVIEW
PRIMARY QUESTIONS
FINDINGS AND ANALYSIS
THE MOBILE CHANNEL BUILDS RELATIONSHIPS NOW, REVENUE IN THE FUTURE
- ADOPTION FORECAST IS PROMISING FOR BANKS AND CREDIT UNIONS
- DELAYING MOBILE CHANNEL RELEASES RESULTS IN A MISSED OPPORTUNITY TO CAPTURE EARLY ADOPTERS
- WHERE DOES THE STRATEGIC VALUE OF THE MOBILE CHANNEL LIE?
MOBILE AS A RELATIONSHIP BUILDING CHANNEL
- INCREASED CUSTOMER SATISFACTION AND LOYALTY TIED TO EXPANDED USAGE OF SERVICES
- MOBILE BANKING CAN DIVERT CUSTOMERS FROM COSTLY CALL CENTERS
- INDIVIDUALIZED, BEHAVIORAL-BASED CROSS-SELLING POSSIBLE THROUGH MOBILE
LIMITING MOBILE ACCESS TO ONLINE BANKERS HINDERS OVERALL ADOPTION
- REMOTE CHANNEL USAGE AND THE LINK TO MORE PROFITABLE CUSTOMERS
DIRECT REVENUE FROM MOBILE PAYMENTS REQUIRES CHANNEL ADOPTION FIRST
- CHALLENGES TO THE DEVELOPMENT OF MOBILE CONTACTLESS PAYMENTS
APPENDICES- ADDITIONAL DATA ABOUT MOBILE BANKING
METHODOLOGY
RELATED RESEARCH
Table of Figures
- Figure 1: Forecast of Availability, Likelihood to Use and Adoption of Mobile Channel for Banking, 2007-2012
- Figure 2: Likelihood to Recommend Online Banking to Friends and Family
- Figure 3: Screenshot from Kiwibank' s Mobile Banking Demo
- Figure 4: Screenshot of NetSpend' s Alerts Setup Page
- Figure 5: Likelihood to Conduct Mobile Banking by Online Bankers
- Figure 6: Attitudes toward Contactless Payments by Likely Mobile Bankers
- Figure 7: Usage of Mobile Channel for Banking Transactions by Age
- Figure 8: Likelihood to Conduct Mobile Banking by Age
- Figure 9: Usage of Mobile Channel for Banking Transactions by Income
- Figure 10: Usage of Mobile Channel for Banking Transactions by Tech Savvy Consumers
- Figure 11: Likelihood to Use Mobile Banking by Tech Savvy Consumers
- Figure 12: Possession of a Variety of Consumer Technology Products
