How Many US Consumers Use Mobile Banking?

February 18, 2009

bofamobilebanking1

A) 30,000,000 US Consumers Do Mobile Banking

B) A fraction of the 30 million potential mobile banking customers have signed up for the service

C) 10% of all online banking U.S. households used mobile banking by the end of 2008 (about 46 million households currently bank online).

D) 3.1 million

E) All of the above.

It turns out that this is not an easy question to answer. As I mentioned previously on MoneyMashup, Bank of America claims that about 1.9 million of their customers use mobile banking.  However, Celent asserts that there were only 400,000 mobile bankers in the US at the end of 2007.  As for the total number of US mobile bankers in 2008, there is a very wide range of estimates.

  • In its banking safety scorecard compiled in November, Javelin found that just a fraction of the 30 million potential mobile banking customers have signed up for the service.
  • Yet this month a CNET article quoted Javelin and said that “an estimated 30 million consumers in the U.S. do mobile banking.”
  • The January 2009 Mobile Marketing Overview quotes Celent and asserts that “10% of all online banking U.S. households will use mobile banking by the end of 2008”.  The company said that about 46 million households currently bank online.  I am not a math major, in fact I even forgot how to do long division the other day, but I believe that means Celent is saying that there are 4.6 million mobile banking households.
  • The Wall Street Journal quotes ABI research and says that the number of mobile bankers in the US climbed to 3.1 million in 2008.

To sum it all up, we have three different research and four wildly different estimates (two different estimates by Javelin) that range from 3.1 million to 30 million. So, if you answered “E) all of the above,” you get a cookie.

Apparently determining how many US consumers use mobile banking is more of an art than a science. Some of the disparity might be explained away by how the different research reports are defining mobile banking. Perhaps some reports include any money related function – including applications not provided by traditional banks.  Even so, I am not sure semantic differences can explain the whole gap.  Bank of America only has 29 million online banking users.  In order for Celent’s estimate to match Javelin’s, we would have to assume that each mobile banking household is made up of a little over 7 mobile banking customers. To confuse you even more, Tower Group estimates that 4.6 million consumers – not households – used mobile banking in 2008.

Does anyone have any insight into why these numbers are so far apart?


Delicious Money Mashup: Enterprise web2.0, Tree.com + Thrive…

February 7, 2009
  • MoBank © The wherever you go bank
    MoBank is a mobile focused bank in the UK. It will be interesting to see how this works. I imagine that they will rely primarily on interchange and premium services that they sell on top of their regular services. I think in the US this concept would work on college campuses. Community banks, and especially credit unions should consider similar initiatives.  Financial institutions could create mobile brands the same way many of them have created online only brands.
  • NACHA Group Close to Proposals for Mobile Payments on the ACH
    It looks like NACHA will be formalizing something that has already been happening anyway: Mobile ACH transfers. PayPal allows you to send P2P payments via your mobile device (text messages or mobile app/site). If you do not have stored funds with PayPal, they pull money from your bank account via ACH. It seems like there is an opportunity for banks to take advantage of any new NACHA guidelines for mobile ACH. It will be interesting to see what NACHA comes up with. Given the wide reach of NACHA and the the participation level of banks, the potential is huge.
  • Security experts warn of online banking Trojan
    These types of threats are still present even with the mandated implementation of dual factor authentication. It seems this is a version of a man-in-the middle attack that intercepts information on its way to or from your computer. This could allow the criminal to take over your session and conduct some transactions on your behalf. This is a problem for Online Banking sites because it is difficult to stop these types of intrusions since they are result of something on the client’s computer and not the Online Banking site. One way banks could help with this would be to offer virus detection software or even hardware (i.e. USB keys) that runs the browser session from a “vault” that is walled off from the operating system.
  • Web 2.0 and the Enterprise: A Symbiotic Relationship
    This presentation lists five reasons why the relationship between the enterprise and web2.0 sites is symbiotic. 1. “The Facebook Affect” Work and personal lives continue to blur. 2. People share with each other if they trust each other. Obviously the workplace fosters that trust and is conducive to sharing ideas online. 3. Big ideas and little ideas matter. It is much easier to gather and manage little ideas via social networking. 4. Social graphs serve as a bridge. Social graphs allow you to combine and aspects of social sites. Linkedin can be used in the enterprise, and I can share these delicious posts on Facebook. 5. The enterprise is changing. Some companies are letting their engineers comment in forums. A broader group of employees is engaging with customers via social tools such as blogging, twitter, and forums.  Although my five reasons would probably be a little different than the author, I agree that social collaboration tools could greatly improve productivity in the workplace.  How many times have you worked for weeks on a project only to find out that someone else in the organization is doing something very similar and much of your work overlaps?  Web2.0 could solve those types of problems and it could create an environment where new ideas are shared more freely and efficiently.
  • Tree.com Acquires Thrive
    Thrive is a financial transaction aggregator in the form of Mint and Wesabe. Tree.com owns several real estate and lending related sites including LendingTree.com. It will be interesting to see how the combine the services of their different sites. Particularly how they combine the services of LendingTree with Thrive. As I mentioned in a previous post adding lending, account opening, bill payment, and transfer services is probably the next step for sites like Mint and Wesabe.

Delicious Money Mashup: iPhone in at BofA, Amazon Payments go Live…

February 6, 2009
  • IOU Central: P2P Lender
    IOU is a new p2p lender set to open in the spring of this year. Despite regulatory scrutiny from the SEC, it seems new p2p lenders are determined to open. It will be interesting to see how IOU differs from other p2p lenders already making loans.
  • Amazon Payments Account Management
    Amazon competes directly with PayPal with this p2p mobile offering. It allows you to send money to others using text messages. It links to your Amazon profile and will use your credit card to fund transfers to other consumers. You can send funds to email addresses, aliases, or mobile phone numbers. If you do not connect a bank account to your profile, then it will pull money from your credit card as a cash advance.
  • Hunkering Down: Strategies for the Financial Crisis
    What should your alternative channel strategy be in a year of financial turmoil? The author suggests puttig mobile on hold, conversing with customers via, email, blogs and podcasts, and adjusting your online marketing strategies. I am not sure I agree with the mobile on hold suggestion. If you are looking to expand your deposit base, there is evidence that a good mobile initiative will help.
  • Mobile Banking Stats: 40% of Bank of America’s 2 million Mobile Bankers Use iPhone or iPod Touch
    Bank of America believes that their iPhone offering may be driving new business. In other words, people are opening accounts at Bank of America just because they want to use the iPhone app.
  • High-Yield Reward Checking News – Growing Popularity
    Rates on high yield rewards checking accounts remain quite high; even higher than those of savings and accounts and CD’s. High rate checking accounts reward customers for using their account in ways that makes the financial institution money – via interchange – and saves them money – by subscribing to eStatements, using Internet Banking, and other electronically delivered services.
  • Fiserv, Jack Henry Upbeat About Core Client Spending
    Most of Fiserv’s and Jack Henry’s revenue comes from small and midsize banks and credit unions. Those midsize clients seem to be doing better than their larger counterparts, and may even raise their spending in some areas this year.