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Increased Mobile Usage and Engagement by Consumers Changing the Game for Banks

 

June 23 - With rising levels of smartphone ownership, and a corresponding increase in consumer usage and engagement, mobile adoption has changed how banks are evaluated by consumers and mobile capabilities are now becoming a critical factor in consumers' selection of their primary bank.

These observations are based upon results of the latest release of the Mobile Financial Services Tracking Study conducted semi-annually by Mercatus LLC, a financial services strategy consulting and research firm. The study surveyed more than 3,000 consumers in May 2011, and focuses on consumers' mobile behavior and the impact mobile devices are having on the banking and payments industries.

"The increase in smartphone ownership is having a profound effect," commented Teresa Epperson, partner at Mercatus. "Our survey reveals that smartphone ownership has risen dramatically among key consumer groups, such as 26-34 year-olds, where smartphones are almost 50% of the mobile phones owned, up from just under one-third only a year ago."

Results of the Mercatus survey also demonstrate the increased levels of engagement smartphone owners have with their phones. In addition to significant texting, emails and Internet access on a daily basis, one-third access social networking sites and almost 10% download videos or movies daily.  Usage for telephone calls is actually in decline.

"This kind of intense engagement will continue to increase, as smartphone functionality continues to expand and the device becomes the primary channel for general 'lifestyle management,'" said Epperson. "As a result, mobile is becoming a dominant factor in consumer decision making --- particularly in retail shopping and financial services."

"With mobile emerging as a critical bank selection criteria, mobile capabilities become extremely important to a bank's new customer acquisition and growth strategies," commented Epperson. "This year, 35% of consumers told us that mobile was an 'extremely important or important' consideration in their selection of a new primary bank, up from 20% one year ago."

The influence of mobile capabilities on consumers staying with their banks was also revealed. According to the Mercatus survey, less than 5% of those who used mobile banking and mobile payments services in the past year switched banks, on par with those who used automatic withdrawals for mortgage or rent payments, and online bill payment services. Interestingly, customer retention related to mobile was greater than that of online banking and direct deposit of paychecks, services that have generally served to retain banks' customers.

"Our survey results indicate that mobile is a major game changer for banks," said Epperson.  "Banks must resist the temptation to view mobile as an optional investment or even an 'alternative' delivery channel.  For the majority of consumers, mobile will far surpass 'traditional' channels in terms of usage and engagement."

About Mercatus LLC
Mercatus LLC is a strategy consulting and research firm focused on the retail financial services.  Mercatus is dedicated to delivering the insights, innovative thinking, and information required to equip clients for success in today's fast-changing marketplace.  The Mobile Financial Services Tracking Study from Mercatus is the financial services industry's best source for data on mobile adoption and usage.


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