33 Percent Increase in Mobile Banking Users, Says New Federal Reserve Report

The use of mobile phones to access bank accounts, credit cards, or other financial accounts continued to increase among adults in the United States last year, according to a Federal Reserve Board report titled Consumers and Mobile Financial Services 2015. The report looks at how consumers access banking services using mobile phones, and their payments for goods and services using mobile phones.

As of December 2014, 39 percent of adults with mobile phones and bank accounts reported using mobile banking - an increase from 33 percent a year earlier. The most common use of mobile banking has been checking account balances or recent transactions. Transferring money between accounts is the second-most common mobile banking activity. More than 50 percent of mobile banking users have received an alert from their financial institution through a text message, push notification, or e-mail, making this the third most common use of mobile banking.

Remote Deposit Capture, or depositing a check to a bank account electronically using a mobile phone camera, was also a common mobile banking activity. In the latest survey, 51 percent of mobile banking users reported depositing a check using their mobile phones, up from 38 percent a year earlier.

22 percent of all mobile phone users made a mobile payment within the 12 month period prior to the survey, up from 17 percent a year earlier. For smartphone owners who reported using mobile payments, the most common types of mobile payments were paying bills through an online system or mobile app, followed by making online or in-app purchases. Paying for a product or service in a store was the next most common type of mobile payment.

The survey also highlighted that while the underbanked make up 14 percent of consumers, 90 percent of that group has access to a mobile phone. The underbanked represent a higher incidence of mobile banking (48 percent) than the fully banked (37 percent). The unbanked make up 13 percent of US consumers and 67 percent of this group have access to a mobile phone.

In the last few years, a new genre of virtual banks has come up, that is primarily targeting tech-savvy mobile users when selling banking and financial products. We can’t say whether such companies (Mobile-Only banking services) will have a telling impact on the payments industry or not in the near future, but these Mobile Banks are certainly generating a lot of buzz in the industry today. With a majority of unbanked and underbanked people having access to mobile services, these mobile-only banks do have a great opportunity on hand.

Some of the key players in the mobile-only banking category are:

  • GoBank
  • Simple
  • Moven
  • Fidor Bank