Mobile Banking Engagement: Data from Digital Insight

Digital Insight has been conducting a comprehensive and ongoing study of financial institution customers. From these studies, the company has been able to provide a deeper view of banking customer behavior across several categories, such as mobile and online banking. In this first post, we examine mobile banking statistics and how they both impact and benefit financial institutions. Below are key findings from the study, and you can view a more in-depth analysis here.

We will be publishing data on additional topics in the coming months, so stay tuned via Banking.com. *For information on the on the methodology used for the study you can download the PDF

Intuit Financial Services’ Innovation Conference: Mobile Trends, Technology Transformation, and Personal & Small Business Finances

In early October, Intuit Financial Services hosted its annual user conference, the Intuit Innovation Conference, in Nashville, Tenn. The conference brought together industry leaders from banks and credit unions across the country, and discussed key topics affecting the financial services industry. To provide a broad spectrum on issues, Intuit hosted an array of esteemed keynote speakers included Steve Forbes, Chairman, CEO, and Editor in Chief at Forbes Media; Tom Kelley, General Manager of IDEO; and, Dan Ariely, behavioral economist and author.

The Banking.com staff got a chance to pull key tidbits from the event, which focused on mobile trends, technology transformation, and personal and small business finances. Below are some top tweets and highlights from the conference:

Mobile:

  • Tablet users touch their financial institution (FI) 30 times per month across multiple devices (tablet, phone and PC) not including text banking touches.
  • Smart phone remote deposit users deposit approximately 2+ checks per month at an average of more than $420 per deposit. Cost savings to FI – $3 each deposit over using a branch.
  • 30% of customers now factor mobile solutions into why they choose their primary FI.
  • Average mobile phone user now spends 12 minutes/day on the actual “phone,” two hours/day doing other things.
  • Mobile is the primary way people interact with their FIs today and growing; mobile banking up 63% to 57 million in 2011.
  • 10% of online banking users are now using their tablet.

Technology Transformation:

  • Web and mobile is eliminating intermediaries like traditional editorial process. Media model of last 150 years has been blasted away.
  • Mobile is changing the media model again. Everything in marketing must be customized to the individual. There are more specialized segments than ever before.
  • Contingent workforce will be 40% in few years (following passions, seeking work/life balance). This offers a new set of financial complexities that financial institutions will need to consider.
  • Digital trends shaping future behavior:
    • World without borders
    • Participatory networks
    • Mobile first & only
    • Humanizing the data
    • Reputation rules
  • “The Digital channel has increased engagement 3x to 32 times/month” – Intuit Financial Services General Manager, CeCe Morken

Personal & Small Business:

  • 2/3 of personal businesses don’t track their mileage for tax time or they track it incorrectly.
  • 50% of small businesses use manual methods (pen paper) to manage finances.
  • Average value of personal business to an FI is $5,000 in revenue per year. Consumer value is $500.
  • Personal small business market segment is growing. Forecast is 32 million by 2018.
  • Personal businesses take longer to make buying decisions than consumers and larger businesses.
  • “74% of #smallbiz owners aren’t wowed by their FI”-Christine Barry of @AiteGroup

A recurring theme of the conference was mobile in the banking industry; how important is a mobile presence to you? Does your FI meet your needs with its mobile solutions? What do you expect from your FI’s when dealing with mobile? Leave us a comment below.

The Impact of Baby Boomers & Seniors on Online Banking

There is a presumption which exists in the world of online banking that baby boomers and seniors do not use their computer and/or mobile device to interact with their financial institution. We’ve all heard the reasons why – security, lack of internet access, or they prefer to bank the way they’ve always banked. However, as a Gen Xer and someone who works in the banking industry, I’ve seen that boomers and seniors do use online banking, and they could fuel the next growth wave within digital banking.

Over the last three years, I have performed portfolio analytics across dozens of Intuit Financial Services’ clients encompassing 2.8 million checking account holders.* These deep dive studies have provided me with insights into the banking behavior of consumers. While baby boomers and seniors have not quite reached the level of adoption rates of online banking as Gen Y/X, it’s hard to ignore their adoption growth over the last several years. Additionally, once baby boomers and seniors become active users of online banking, their engagement within the channel rivals Gen Y/X. Baby boomers and seniors, ages 49-68 and over 68 respectively, account for 46 percent of all open checking account holders.

* See chart below for breakdown by generation and comparison of bank vs credit union.

Across the 2.8 million checking account holder segment I have analyzed, 55 percent of Gen Y (0-28 in age) consumers actively use online banking. This rate is 57 percent for Gen X (29-48); 46% for baby boomers; 27% for Seniors. Those stats probably don’t surprise anyone, but what if I were to say that both baby boomers and seniors demonstrate a higher active use rate for bill payment than GenX and GenY? Granted, Gen Y includes a portion of consumers who (enjoy it while you can) haven’t reached the point in their financial lifecycle to have payment obligations, but it’s probably safe to say that most Gen Xers have monthly obligations. 35 percent of online banking boomers utilize bill payment, compared to 33 percent for seniors and 32 percent for Gen X. Granted, the variance here is very tight across these 3 generations, but the point I’m making here is that boomers and seniors utilize the services within the online channel once they feel comfortable with using online banking. And it’s not just bill payment – Personal Financial Management tools, internal funds transfer, eStatements – boomers and seniors have shown an appetite for these services, and as we know, the more engaged a consumer is within a channel, the less likely they are to leave the financial institution.

According to a study by Market Insights Professionals, “Boomers…are not far behind in embracing the Internet for their shopping needs–two out of three Boomers have researched a product or service online in the past three months, and more than seven out of 10 have made an online purchase during the same time frame. Boomers are the generations with the highest online spending levels.”[i]

What is also interesting within the data I’ve analyzed is the trend over time related to the active use curve of online banking. The traditional product curve for online banking reveals early adopters are younger demographics who embrace technology, have grown up with a computer and internet access, and value anywhere/anytime convenience. Pew Research found that “While the youngest generations are still significantly more likely to use social network sites, the fastest growth has come from internet users 74 and older: social network site usage for this oldest cohort has quadrupled since 2008, from 4% to 16%”[ii]. Technology services such as email, Skype, eBay have become increasingly popular with boomers and seniors, and as their comfort level with technology grows, so too does their adoption rates of online banking. The table below illustrates the online banking behavior of the same checking account holders over a two year period. The annual growth rate of seniors actively using online banking is outperforming all other generations, followed by Gen Y, Boomers, and Gen X. The additional growth in Gen Y is believed to have been fueled by mobile banking.

I know what you’re thinking – because seniors started at such a low adoption rate there was more room for them to grow. That is true, but their rate of growth still exceeded other generations, in part because technology is becoming more commonplace in their household and financial institutions have vastly publicized the security and convenience of online banking. “Older generations become more active as their experience with a new channel increases. Our research shows that as tenure with a digital channel increases, so, too, does a user’s willingness to conduct more complex interactions through that channel — such as selling a security through a mobile phone.”[iii]

While the saturation point of online banking for Gen Y and X might be near, boomers and seniors not only represent the majority of the US population, but their acceptance of online banking continues to grow at a rapid rate. Financial institutions and providers of online banking services must be aware of consumer demographics and perhaps go so far as to customize online banking for those demographics. Whether it’s the font size on the computer screen, products/services presented to the consumer, or changes to secure login credentials, demographics should not be ignored when considering growth in the online banking channel. Do not grow complacent in pursuing this older market. As you can see, there is much opportunity and benefit to attract the older generation. It is observed, that once the baby boomers and seniors gain confidence in the online channel, they will begin to cultivate additional online services, which presents another chance to cross-sell this generation.

About Jason Weinick: Jason is a Senior Analyst with Intuit Financial Services and leads the initiative on client profitability analyses, providing banks and credit unions a valuable in-depth look into the value of the online channel. Jason’s background includes 15 years experience within the financial services sector, focusing on consumer behavior, risk modeling, reporting, and financial analysis. Jason holds a Bachelor of Science degree in Finance from Clemson University.


[i] November 2, 2011: The State Of Consumers And Technology: Benchmark 2011, US, by Gina Sverdlov, for Market Insights Professionals

[iii] June 8, 2011: Mobile And Social Technologies Come Late To Wealth Management: Younger Generations Are Just The First Wave Of Mobile and Social Adopters- by Bill Doyle with Benjamin Ensor, Amelia Martland, and Beth Hoffman

Video: Turning Ordinary into Extraordinary

CeCe Morken, senior vice president and general manager of Intuit Financial Services recently presented the opening keynote at the Barlow Research National Client conference. This is the final part of the video series that we’ve been highlighting on Banking.com.

Video: Mobile and Social Can’t be Ignored

CeCe Morken, senior vice president and general manager of Intuit Financial Services recently presented the opening keynote at the Barlow Research National Client conference. This is part five of the video series.

Video: How Love Enters the Equation with Small Business

CeCe Morken, senior vice president and general manager of Intuit Financial Services recently presented the opening keynote at the Barlow Research National Client conference. This is part four of the video series.

Video: New Expectations for Customer Experience

CeCe Morken, senior vice president and general manager of Intuit Financial Services recently presented the opening keynote at the Barlow Research National Client conference. This is part three of the video series.

How To Profitably Serve Small Business Customers

Small businesses, especially micro businesses, are an underserved customer within financial institutions.  The small business market will grow from approximately 27 million to 33 million in the next 10 years, with many of these being micro businesses. Many organizations outside of financial services are targeting these very segments.

In this video CeCe Morken, president and general manager of Intuit Financial Services, sat down with Greg Wright, to discuss how Intuit can help you better and more profitably serve small business customers.

Video: Tomorrow’s Small Business Customer: Helping You Crack a Tough Nut

CeCe Morken, president and general manager of Intuit Financial Services, sat down with Greg Wright, small business solutions leader for Intuit Financial Services, to discuss specifically what Intuit is doing to help financial institutions engage small businesses.

“Show Me The (Mobile) Money”– A Case Study in Monetization

*This blog was originally posted on The Intuit Network

In this week’s Predictions Webcast, IDC’s Chief Analyst Frank Gens declared 2012 the year “Mobile Wins,” meaning we’ll see tablets and smartphones handily outpace their PC predecessors. While this isn’t necessarily a shock– mobile has been barreling toward us all for some time now– the concept of effectively capatalizing on mobile reamins a hot topic.

In the following presentaiton from SIAA’s “All About Mobile Conference,” Intuit’s own John Flora shares how Intuit Financial Services is helping mid-sized banks and credit unions serve their customers at their point of need in the cloud, on a tablet or even a smartphone. It all starts with focusing on “real customer problems” and designing for seamless experiences.