Most US consumers remain wary of Mobile Banking – Recent Study

Although a growing number of consumers are taking advantage of mobile banking, most have yet to use their cell phones or PDAs to manage their cheque accounts or savings accounts.

The two biggest reasons, according to an August report by Javelin Strategy & Research in San Francisco, are concerns about security and a “lack of a compelling value proposition.” In other words, many question; “What’s the point?”

Javelin, which says 19 of the 30 largest US financial institutions now offer mobile banking, rates Federal Savings Bank “best in class” for the second year in a row. The others with the most robust mobile banking offerings are Bank of America, JPMorgan Chase, Citibank and Wells Fargo, which all provide multiple modes for mobile banking, including text banking, access to websites created for mobile banking and smartphone applications.

Still, banks are missing opportunities. Just over one-third of top financial institutions have Android-based applications, compared to 80 percent that have iPhone apps, even though Android owners now outnumber iPhone users and half of them are mobile bankers, the research firm says. Other opportunities include money transfers, remote deposit and account opening capabilities, according to Javelin.

Meanwhile, results of recent survey by KPMG, the audit, tax and advisory firm, show almost one in five US consumers has conducted a banking transaction on a mobile device, compared to only 9 percent when KPMG completed the survey 18 months earlier.

Young people ages 16 to 24 are the most likely users, with a third reporting they had banked on a mobile device. Among US respondents who had never banked by cell phone, roughly half cited security and privacy as the primary reasons.

Those who said that they were comfortable with mobile banking grew to 16 percent, up 6 percent from the last survey. Those who weren’t comfortable dropped to 55 percent, an 11 percent decline, according to KPMG.

Despite this US consumers are behind much of the world when it comes to mobile banking. KPMG says about one-third of consumers globally in the new survey say they are comfortable making financial transactions on a mobile device.