Table of Contents
Executive Summary
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- The issues
- Large banks dominate and deposits at commercial banks are growing
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- Figure 1: Domestic deposits of FDIC-insured commercial banks and savings institutions, 2007-14
- Mobile banking is growing
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- Figure 2: How banking transactions are conducted, all, December 2013 versus August 2015
- Lack of trust over security concerns stains landscape
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- Figure 3: Banking attitudes and behaviors, all, December 2015
- The opportunities
- Opportunities available to increase mobile banking adoption via security emphasis
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- Figure 4: Mobile banking usage, all, December 2015
- Opportunity to meet the needs of many unsatisfied mobile banking consumers
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- Figure 5: Mobile banking preferences, all, December 2015
- Financial institutions can encourage interaction in every channel based on service
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- Figure 6: How banking transactions are conducted, all, December 2015
- What it means
The Market – What You Need to Know
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- Deposits at commercial banks over $10 trillion
- US personal savings rate slowly increases
- The economy remains strong
- Fed interest rate hike and savings rates
- Smartphone and tablet sales rise
Market Size and Forecast
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- Number of banks and credit unions continues to fall
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- Figure 7: Number of FDIC-Insured banks and credit unions, 1996-2014
- Assets at commercial banks climb
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- Figure 8: Assets of FDIC-insured commercial banks and savings institutions, 2007-14
- Deposits at commercial banks strong
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- Figure 9: Domestic deposits of FDIC-insured commercial banks and savings institutions, 2007-14
- Asset growth at credit unions tops 30%
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- Figure 10: Total assets at US credit unions, 2009-15
Market Factors
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- US personal savings rate slowly increases
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- Figure 11: Personal savings rate, 2008-15
- The economy remains strong
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- Figure 12: Percentage change from preceding period in GDP (Q1 2013-Q3 2015)
- Fed interest rate hike and savings rates
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- Figure 13: Effective federal funds rate, 1990-2015
- Smartphone and tablet sales rise
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- Figure 14: Total US unit smartphone sales, 2009-19
- Figure 15: Total US sales of tablets, at current prices, 2010-15
Key Players – What You Need to Know
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- Mobile banking is growing
- Need to address security concerns
- First hike interest rate in nine years alters banking landscape
What’s Working?
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- Mobile banking is growing
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- Figure 16: How banking transactions are conducted, all, December 2013 versus August 2015
What’s Struggling?
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- Security concerns have many nervous
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- Figure 17: Banking attitudes and behaviors, all, December 2015
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- Figure 18: BMO Harris Bank email, 2015
- Figure 19: Chase mobile ad, 2015
- Figure 20: Bank of America email, 2015
What’s Next?
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- First interest rate hike in nine years alters banking landscape
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- Figure 21: Synchrony Bank print ad, 2016
- Figure 22: Capital One email ad, 2016
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- Figure 23: Effective federal funds rate, 1990-2015
- Wells Fargo testing voice recognition and biometrics
The Consumer – What You Need to Know
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- Large banks dominate
- Free checking and convenience essential features for consumers
- Mobile banking essential for Millennials and Hispanics
- Four of 10 yet to adopt mobile banking
- Opportunity for more satisfying mobile experience
- Lack of trust and security concerns present barrier for many
- Banking interactions determined by type of transaction
- Consumers concerned about security
Account Ownership
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- Checking account ownership universal
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- Figure 24: Account ownership, all, December 2015
- Men more likely to own investment accounts
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- Figure 25: Account ownership, by gender, December 2015
- Variety of accounts used increases with wealth
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- Figure 26: Account ownership, by household income, December 2015
- Black consumers underserved in investment, mortgage accounts
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- Figure 27: Account ownership, race/Hispanic origin, December 2015
Location of Primary Account
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- Large banks dominate
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- Figure 28: Location of primary account, all, December 2015
- Credit union client base skews younger
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- Figure 29: Location of primary account, credit union ownership, by age group, December 2015
- Millennials using large banks for investment accounts
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- Figure 30: Location of investment account, by generation, December 2015
- More affluent consumers using internet-only banks
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- Figure 31: Location of any account, by household income, December 2015
- Parents using online and alternative banks
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- Figure 32: Location of any account, by presence of children, December 2015
- Hispanics twice as likely to use alternative bank
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- Figure 33: Location of any account, by race/Hispanic origin, December 2015
Essential Banking Features
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- Free checking and convenience essential feature for consumers
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- Figure 34: Essential banking features, all, December 2015
- Mobile banking essential for Millennials
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- Figure 35: Essential banking features, by generation, December 2015
- Online banking most popular among more affluent
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- Figure 36: Essential banking features, by household income, December 2015
- Hispanics most likely to use mobile banking
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- Figure 37: Essential banking features, by race/Hispanic origin, December 2015
Mobile Banking Usage
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- Four of 10 yet to adopt mobile banking
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- Figure 38: Mobile banking usage, all, December 2015
- Large national bank customers lead in mobile banking usage
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- Figure 39: Mobile banking usage, by primary account location, December 2015
- Millennials using mobile banking apps
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- Figure 40: Mobile banking usage, all, December 2015
- Parents nearly twice as likely to use mobile banking
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- Figure 41: Mobile banking usage, by presence of children, December 2015
- Three-quarters of Hispanics banking mobile
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- Figure 42: Mobile banking usage, by race/Hispanic origin, December 2015
Mobile Banking Preferences
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- More are banking mobile, still room for improvement
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- Figure 43: Mobile banking preferences, all, December 2015
- Young women frequent mobile banking users
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- Figure 44: Mobile banking preferences, by gender and age, December 2015
- Parents prefer phone/tablet to computer
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- Figure 45: Mobile banking preferences, by presence of children, December 2015
- Hispanics opening accounts on mobile devices
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- Figure 46: Mobile banking preferences, all, December 2015
Reasons for Not Using Mobile Devices
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- Lack of trust and security concerns present barrier for many
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- Figure 47: Reasons for not using mobile devices, all, December 2015
- Younger customers more trusting of digital security
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- Figure 48: Reasons for not using mobile devices, all, December 2015
- Security of greater concern among more affluent
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- Figure 49: Reasons for not using mobile devices, all, December 2015
- Hispanics agree mobile banking valuable, but seek repeated use
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- Figure 50: Reasons for not using mobile devices, by race/Hispanic origin, December 2015
How Banking Transactions Are Conducted
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- Banking interactions determined by type of transaction
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- Figure 51: How banking transactions are conducted, all, December 2015
- Checking account balances most likely action on mobile device
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- Figure 52: How banking transactions are conducted, all, December 2015
- Small community banks succeed with newer mobile transactions
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- Figure 53: How banking transactions are conducted, Any mobile devices, December 2015
- Hispanics far more likely to transfer money via mobile device
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- Figure 54: How banking transactions are conducted, any mobile devices, December 2015
Banking Attitudes and Behaviors
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- Room for improvement on trust and service
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- Figure 55: Banking attitudes and behaviors, all, December 2015
- Credit Union customers trust their institution
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- Figure 56: Banking attitudes and behaviors, credit unions versus all, December 2015
- Young men least trusting of financial institutions
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- Figure 57: Banking attitudes and behaviors, all, December 2015
- Opportunity for financial advisory services for $75K-99K group
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- Figure 58: Banking attitudes and behaviors, by household income, December 2015
- Small banks and credit unions compete on service
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- Figure 59: Banking attitudes and behaviors, by household income, December 2015
- Hispanics looking to consolidate accounts
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- Figure 60: Banking attitudes and behaviors, by race/Hispanic origin, December 2015
Appendix – Data Sources and Abbreviations
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- Data sources
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
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