As usage of mobile banking rises in the U.S., more consumers are switching their primary financial institutions to get it, says a report from Mercator Advisory Group. Young adults and mobile banking users are most likely to switch, in part to gain more robust mobile banking services.
Now, three out of five U.S. consumers perform banking activities using their mobile phone and/or tablet, up from nearly half who did so in 2013 and one-third who did so in 2012. Customers are conducting their banking activities for convenience and on-the-go accessibility.
Mobile-based money transfer to another person’s account is one of the fastest growing mobile banking activities, doubling in usage in the U.S. from 2013 to 2014. In 2014, half of young adults surveyed used their mobile phones to transfer money to another person’s account and 22% of young adults used their mobile to transfer funds to accounts outside this country.
Switching over offerings
Both mobile banking users and young adults, who are the most likely to be using mobile banking, are switching financial institutions more than ever as they reevaluate their banking institutions’ offerings.
Young adults, because of the transient nature of their life stage, have always been more likely to switch financial institutions, but over the past two years, young adults have reported switching far more than usual.
In fact, 31% of young adults and 28% of mobile banking users surveyed in 2014 reported they switched their financial institutions over the past two years, a notable increase from approximately 20% who reported doing so in our 2013 survey. Young adults and mobile banking users are now nearly twice as likely as the average U.S. consumer (16%) to have switched.
With the rise in mobile banking, consumers apparently are increasingly reevaluating their financial institutions’ banking offerings and more have decided to change financial institutions.
“Improving the usability and functionality of mobile banking will continue to be vital for customer retention,” says Karen Augustine, manager of Primary Data Services, including the CustomerMonitor Survey Series, at Mercator Advisory Group.