Mobile Banking and the Underbanked

by Banking.com Staff December 19, 2011   Insights

As we’ve discussed in many recent posts, mobile banking continues to grow in popularity as more consumers utilize smartphone devices. The Intuit Financial Services 4th Annual Financial Management Survey found nearly one quarter (23 percent) of consumers are using a mobile device for banking needs and an additional 17 percent plan to try mobile banking in 2012.

Earlier this month, James Van Dyke of Javelin Strategy and Research delved into an interesting topic: low-income consumers and mobile banking. As Van Dyke writes in his article, the correlation between the low-income demographic and mobile banking shows an interesting connection.

Van Dyke looked a number of expert analyses, including a Javelin study of more than 3,000 U.S. consumers and presented the following data:

U.S. consumers who lack a depository bank or credit union account are:

  • Less likely to have a landline phone connection, by 10 percentage points
  • More likely to have a mobile phone, by six percentage points
  • Slightly more likely to own a smartphone (perhaps surprisingly)

Through his research, Van Dyke also found that the under-banked tend to tap into their finances more frequently and are more likely to be hyperactive users. For retailers this holiday season, this means the under-banked will be checking balances and finances on the spot to determine if they have the means to buy goods, but are also very likely to make purchases directly from their mobile devices.

Van Dyke wrapped up by offering his advice on the correlation between the under-banked and low-income consumers, “Strategist and technologists take heed: while it’s easy to think of new technology as having primary appeal to higher income individuals, mobile defies this truism because it is more likely to be the sole way for lower-income people to manage accounts and purchase goods.”

What are your thoughts on this research? Have you noticed a demographic split at your FI among mobile banking users? Tweet @bankingdotcom or leave us a comment below.

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