ARCHIVES: This is legacy content from before Marketing Dive acquired Mobile Marketer in early 2017. Some information, such as publication dates, may not have migrated over. Check out the new Marketing Dive site for the latest marketing news.

Consumers are apathetic about mobile banking: Forrester

A new study from Forrester Research Inc. claims that the vast majority of online consumers simply are not interested in mobile banking.

While Generations X and Y are slightly more receptive, most online bankers and bill payers are not sold by the mobile banking pitch despite their bank or credit union imploring them to "bank anytime, anywhere," according to Forrester analyst Emmett Higdon.

"Sizeable advertising budgets by the top banks have generated awareness of the service, but mobile banking's duplication of online banking functionality is failing to drive significant adoption," Mr. Higdon said in a new report with colleagues Catherine Graeber and Courtney Tincher.

"Why? Online bankers and bill payers don't see their transactions as urgent enough to warrant mobile access," he said. "Instead, they prefer to wait until they can access the Web, ATM or phone channel."

Intense competitive pressure over the past 18 months forced many large and small U.S. banks to offer a mobile banking service and entice their online customers to mobile, Mr. Higdon said in his report.

Built it, won't come
Bank of America reports having 1 million active mobile banking users, or 4 percent of its nearly 25 million online banking customers.

But few other banks disclose their mobile banking customer base or adoption rate despite extensive marketing campaigns from Chase, Wachovia, Citibank, SunTrust and Washington Mutual.

Findings from Forrester's North American Technographics Financial Services Online Survey for the second quarter show that use of mobile banking nationwide remains low.

Research showed that consumers are aware of mobile banking mainly due to the marketing efforts of early movers. On the plus side, six in 10 online consumers surveyed have heard of mobile banking.

However, just 5 percent of online consumers are using a mobile banking service in the second quarter of this year. This is a drop from the fourth quarter of 2006 when 4 percent of online consumers were using their bank's mobile service.

Those who do use a mobile banking service are younger. Sixty-eight percent of mobile users are either Generation Y ages 18-28 or Generation X between 29 and 42 years.

Only 15 percent of mobile users are older boomers ages 53 to 63 and seniors 64 and older, the survey found.

"Banks have been wooing mobile customers with the promise of 'banking anytime, anytime' -- a message largely falling on deaf ears," Mr. Higdon said.

"In fact, among all online users, there is little interest and no appreciable differences among segments," he said.

Little difference across generations
Mr. Higdon went so far as to say that secure site servers are no more interested in mobile banking than non-users.

Only 4 percent of online adults are interested or very interested in mobile banking, he said. Online bankers and bill payers raise that interest level by only 1 percentage point.

Also, interest is low across all generational segments.

Six percent of Generation Yers are interested or very interested in mobile banking -- not much more than the 4 percent of younger boomers ages 43-52.

Finally, household income level has little effect on interest in mobile banking.

The group most interested -- households with incomes of $75,000-$99,999 -- differ from the least interested -- those with incomes of less than $37,500 -- by only 3 percentage points, Forrester found.

Not convinced of need
In yet another damning indictment, the report claims that consumers are not convinced that they need mobile banking.

As consumers moved from the retail branch to the ATM to the Internet, they found reasons each time to adopt the new channel, the report said.

For example, the ATM offers 24-hour convenience and the Web made home banking and online bill pay a reality. But consumers have not found a compelling reason to adopt mobile banking, Mr. Higdon said.

Instead, online consumers believe that their needs are not urgent.

More than 40 percent of online adults feel that their banking needs can wait until they can access their accounts through the telephone, Web or ATM.

"The functionality on the mobile channel is not sufficiently better or faster to create either preference or urgency," Mr. Higdon said in his report.

Second, he said that mobile banking isn't secure.

More than one-third of the surveyed prospective mobile bankers are concerned that the channel is not secure, per the report.

"While customers raise security as a concern with nearly any electronic banking service, recent high-profile data losses and concerns about carriers' role in securing their data have them doubly worried about the state of security in the mobile channel," Mr. Higdon said.

And then there's this troubling finding: no apparent benefit to mobile banking.

Thirty-five percent of online users told Forrester that they simply "don't see the point" of mobile banking. They don't understand or buy into the mobile banking pitch from their bank or financial services institution.

Different this time?
Mobile banking's first incarnation in 1999 suffered from slow speeds, lack of standardization and anemic consumer adoption, the Forrester report said. Speed and device issues now have been addressed, but consumer interest has not caught up.

"Here we are almost 10 years later, and Forrester is getting a bad sense of déjà vu," Mr. Higdon said in his concluding remarks. "Will banks again be forced to shutter their mobile platforms due to a lack of interest?

"Forrester believes that this phase of mobile banking will be considered a success when the industry reaches an adoption level of at least 20 percent of online consumers using mobile banking," he said.

"Unfortunately, we don't see that happening before year-end 2011. Why? That's when we expect to see mobile commerce and mobile payments begin to have a significant impact on the adoption of mobile banking.

"Banks that want to succeed in the mobile channel will be forced to take a long-term view -- that means having significant patience and management support to endure several more years of single-digit growth in this emerging channel."