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Mobile Banking - US - September 2016

"Consumers increasingly use their mobile devices – especially their phones – to manage every aspect of their lives. However, this reliance has not transferred completely to banking. This Report will examine some of the reasons why this is so and the steps financial institutions can take to increase interest, and ultimately, usage in mobile banking apps. Especially as online-only banks make inroads into the market, traditional banks need to develop apps that can help them compete for the younger and multicultural customers who are most tethered to their mobile devices."
- Robyn Kaiserman, Senior Financial Services Analyst

This report discusses the following key topics:

  • Security is still a major concern
  • Half of those who tried a mobile app don’t understand it

For the purposes of this Report, Mintel has used the following definitions:

  • Mobile banking is banking conducted on any mobile device, including smartphones and/or tablets. It does not include banking conducted on any type of computer, including laptops. The Report covers:
  • Downloading and usage of mobile banking apps
  • Types of transactions conducted via different banking channels
  • How institutions can encourage consumers to increase mobile banking usage

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Security is still a major concern
            • Figure 1: Reasons for not downloading or using mobile banking app, June 2016
          • Half of those who tried a mobile app don’t understand it
            • Figure 2: Mobile banking behavior, by generation, June 2016
          • The opportunities
            • Expand benefits of mobile banking
              • Figure 3: Reasons for not downloading or using mobile banking app, June 2016
            • Make it easy to open accounts via mobile app
              • Figure 4: Preference for banking channels, by channel, June 2016
            • What it means
            • The Market – What You Need to Know

              • The challenge of non-banks
                • Mobile phone sales growth
                  • US demographics will help mobile banking growth
                  • Market Perspective

                    • The challenge of non-banks
                      • Figure 5: Attitudes toward FinTech innovations, by demographic segment, March 2016
                  • Market Factors

                    • Mobile phone sales growth is slowing
                      • Figure 6: Total US volume sales and fan chart forecast for mobile phone sales, 2010 -20
                    • Changing US demographics will help mobile banking growth
                      • The Hispanic population is young and growing
                        • Figure 7: Hispanic population, by generation, 2016
                      • Growth of younger generations
                        • Figure 8: Percentage of US population by generation, 2011, 2016, 2021
                    • Key Players – What You Need to Know

                      • Banks focus on mobile experience
                        • Mobile apps still not as widely used as expected
                          • Location-based technology
                            • Biometric authentication
                              • In-app marketing
                              • What’s Working?

                                • Banks focus on mobile experience
                                  • Figure 9: Reasons to increase mobile banking usage, by demographics, June 2016
                                • Biometric authentication
                                  • Security – or impression of security – is improving
                                  • What’s Struggling?

                                    • Mobile apps still not as widely used as expected
                                      • Usage by customers of smaller banks is especially low
                                        • Figure 10: Mobile banking downloads and use, by type of bank where primary account is held, June 2016
                                      • Institutions need to communicate better
                                        • Figure 11: Mobile banking behavior, by generation, June 2016
                                    • What’s Next?

                                      • Location-based technology
                                        • In-app marketing
                                        • The Consumer – What You Need to Know

                                          • Checking accounts more popular than savings accounts
                                            • Half have not downloaded any mobile banking apps
                                              • Smaller banks lag in usage
                                                • Security is less of an issue for Millennials
                                                  • Most consumers need more help with the apps
                                                    • Branches and computers preferred for some transactions
                                                      • Security is largest concern, but consumers are looking for help
                                                      • Location of Accounts

                                                        • Checking accounts more popular than savings accounts
                                                          • Figure 12: Location of primary account, June 2016
                                                        • Hispanics more likely than non-Hispanics to prefer national banks for checking
                                                          • Figure 13: Location of primary account, checking, by Hispanic origin, June 2016
                                                      • Mobile Banking App Usage

                                                        • Half have not downloaded any mobile banking apps
                                                          • Figure 14: Mobile banking downloads and use, June 2016
                                                        • Millennials are heaviest users
                                                          • Figure 15: Mobile banking downloads and use, by generation, June 2016
                                                        • Young men use mobile banking more than others
                                                          • Figure 16: Mobile banking downloads and use, by age and gender, June 2016
                                                        • Mobile banking popular among Hispanics
                                                          • Figure 17: Mobile banking downloads and use, by Hispanic origin, June 2016
                                                        • Smaller banks lag in usage
                                                          • Figure 18: Mobile banking downloads and use, June 2016
                                                      • Reasons for Not Downloading Apps

                                                        • Security is less of an issue for Millennials
                                                          • Figure 19: Reasons for not downloading mobile banking apps, by generation, June 2016
                                                        • Women more concerned with security
                                                          • Figure 20: Reasons for not downloading mobile banking apps, by gender, June 2016
                                                        • Distrust of security increases with income
                                                          • Figure 21: Reasons for not downloading mobile banking apps, by household income, June 2016
                                                        • Challenges for institutions trying to increase usage
                                                        • Mobile Banking Behavior

                                                          • Most consumers need more help with the apps
                                                            • Figure 22: Mobile banking behavior, June 2016
                                                          • Hispanics are less likely to understand their institution’s app
                                                            • Figure 23: Mobile banking behavior, by Hispanic origin, June 2016
                                                          • Blacks are more comfortable with apps than are Whites
                                                            • Figure 24: Mobile banking behavior, by race, June 2016
                                                          • Phones are preferred to tablets
                                                            • Figure 25: Mobile banking behavior, by generation, June 2016
                                                          • Mobile banking usage is increasing
                                                            • Figure 26: Increase in mobile banking usage, by generation, June 2016
                                                        • Banking Channel Preferences

                                                          • Branches and computers preferred for some transactions
                                                            • Figure 27: Preference for banking channel methods, by channel, June 2016
                                                          • Hispanics more likely than non-Hispanics to use apps
                                                            • Figure 28: Preference for banking channel methods, by Hispanic origin, June 2016
                                                          • Apps are preferred over mobile web
                                                            • Figure 29: Preference for banking channel methods, by channel, June 2016
                                                          • How mobile banking is used
                                                            • Large banks focus on transactions
                                                              • Figure 30: Bank of America and Wells Fargo mobile banking emails, 2016
                                                          • Reasons to Increase Usage

                                                            • Security is largest concern
                                                              • Figure 31: Reasons to increase use of mobile banking, June 2016
                                                            • Most older consumers won’t ever use mobile banking
                                                              • Figure 32: Reasons to increase use of mobile banking, by generation, June 2016
                                                            • Thoughts about security
                                                              • Mobile banking as a money management tool
                                                                • Figure 33: Reasons to increase use of mobile banking, by generation, June 2016
                                                              • Blacks want texts to help track banking activity
                                                                • Figure 34: Reasons to increase use of mobile banking, by generation, June 2016
                                                              • Incentives are important
                                                                  • Figure 35: St. Mary’s credit union online mobile app ad, 2016
                                                                  • Figure 36: Everbank direct mail mobile app ad, 2016
                                                              • TURF Analysis

                                                                • Better security most likely to increase usage
                                                                  • Figure 37: TURF analysis – Reason to increase use of mobile banking, June 2016
                                                              • Appendix – Data Sources and Abbreviations

                                                                • Data sources
                                                                  • Sales data
                                                                    • Fan chart forecast
                                                                      • Consumer survey data
                                                                        • Consumer qualitative research
                                                                          • Direct marketing creative
                                                                            • Abbreviations
                                                                              • Abbreviations
                                                                              • Appendix – TURF Analysis

                                                                                • Methodology
                                                                                  • Figure 38: Table - TURF analysis – Reason to increase use of mobile banking, June 2016
                                                                              • Appendix – Market

                                                                                  • Figure 39: Population by Hispanic origin, 2011, 2016, 2021

                                                                              Companies Covered

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                                                                              Mobile Banking - US - September 2016

                                                                              US $3,995.00 (Excl.Tax)