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Mobile Banking Soars in Spite of Skeptics

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Mobile Banking Soars in Spite of Skeptics

More and more consumers are accessing their bank accounts, credit cards and other financial accounts through smartphones and tablets, creating a boom in the mobile banking industry.

The Federal Reserve Board has released its latest report on mobile financial services and it shows a 33% increase in the use of mobile banking over the last year. By November 2012 nearly half of all smartphone users had accessed mobile banking services sometime in the previous 2012. Here are some year-over-year statistics from the report:

  • 42% of smartphone users utilized mobile banking in 2011
  • 48% of smartphone users utilized mobile banking in 2012
  • 21% of mobile phone users utilized mobile banking in 2011
  • 28% of mobile phone users utilized mobile banking in 2012

That represents an increase of 6% for smartphone users and 7% for mobile phone users last year over the year before. Making payments at point-of-sale terminals via smartphones was less common; only 6% of smartphone owners reported doing that.

Underbanked consumers using mobile banking more

People who do not have bank accounts – known as underbanked consumers – are heavy users of mobile banking services and showed the largest increase of usage. Underbanked people used check cashing services, payday lenders, or prepaid cards instead of having traditional bank accounts. Approximately 10% of the U.S. population is classified as underbanked.

Of that 10%, over half own mobile phones – 59% have a mobile phone. And half of those are smartphones. In the December 2011 data, only 29% of the underbanked population said they had used mobile banking during the past year. In November 2012 that number jumped to 49%.

Doubts linger for some consumers

Even though mobile banking is becoming more popular, many are still skeptical of the need to use them for financial transactions. Of those mobile phone owners who do not use mobile banking, more than half say they have no interest in doing so. Folks also reported being doubtful of the benefits and security of mobile payments or simply thought that other payment methods were easier to use. Less than 25% of mobile phone owners said they wanted to use their phones to make point-of-sale purchases.

How people are using mobile banking

Reviewing account balances and recent transactions, transferring money between accounts and depositing checks are the most common things people report doing with their mobile phones and smartphones. Depositing checks has become much more popular over the last year; the 21% of mobile phone users who said they had deposited checks through mobile banking in 2012 was twice the percentage who did so the year before.

Shoppers like to use their phones to compare prices in stores; 42% of smartphone owners said they had done this over the last year. And nearly two-thirds of those people reported changing where they bought items due to the information they found via smartphone.

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