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SUMMARY: Consumers desire for a fast, easy way, to be in control of their finances is driving the increased adoption of mobile banking. Financial institutions are seeing positive effects to their bottom line as it creates cost savings and improved customer loyalty. Perhaps the most rewarding reason to pursue a mobile banking value proposition is because mobile bankers maintain higher average balances and have a greater net worth than the average customer.
The mobile banking consumer carries a higher balance than the average banking consumer and has a greater net worth. While still only representing a small percentage of banking households, that number is increasing. Understanding the unique needs of this lucrative segment could mean winning and retaining valuable customers. To get into the mindset of the mobile banking consumer, Nielsen profiles five segments of consumers and offers strategies on how to reach them. Consumer confidence and comfort levels in transacting over mobile devices are at an all time high. For financial institutions, mobile banking creates efficiencies, cost savings, drives customer loyalty, engages new segments and offers real-time solutions. But to truly understand the needs of the mobile banking user, banks must go beyond basic mobile services and learn how they interact with financial institutions. Nielsen examined the mobile banking user and found that 13.2% of households accessed their bank account via a mobile device in second quarter 2010 versus 20.8% who accessed their account via the banks customer service call center. While mobile access penetration is lower than other channels, it has grown from 11.6% in first quarter and call center access has remained relatively flat quarter-over-quarter.
Copyright 2010 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of The Nielsen Company. 10/2448
Market Average
Phone Access
Online Banking
Mobile Access
25 20 15 10 5 0 Accessed Acct Info by Phone Q1 2010 Accessed Accts via Mobile Device Q2 2010 11.6 13.2
20.7
20.8
Source: Nielsen Financial Track. National sample = 19,971 for Q1 and Q2 2010.
Mobile banking users also bring greater value to an institution by maintaining higher average balances ($64,303) versus ($48,384) for the average customer and greater net worth ($341,017) versus their online banking counterparts ($313,346) or the market average ($281,263).
$400,000 Chart 2 Average Deposit Balance $350,000 $100,000 $300,000 $80,000 $250,000
$341,017 $313,346
$60,000 $200,000
$100,000 $40,000 $150,000 $20,000 $0 Market Average Phone Access Online Banking
Mobile Access
Source: Nielsen Financial Track. National sample = 55,428 for three quarters ending Q3 2010.
25 20
Copyright 2010 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered 15 trademarks of The Nielsen Company. 10/2448
20.7
20.8
$400,000 $350,000 $300,000 $250,000 $200,000 $100,000 $150,000 $0 Market Average Phone Access Online Banking Mobile Access
Source: Nielsen Financial Track. National sample = 55,428 for three quarters ending Q3 2010.
Copyright 2010 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of The Nielsen Company. 10/2448
Mobile Basics Covering 11.3% of mobile bankers and 10.8% of the population, this segment of practical, family oriented, small town, blue collar workers are interested in the no frills option. In Touch, On the Go Including 6.8% of mobile bankers and 7% of the population, these suburban soccer moms and dads tend to buy on impulse. Both Mobile Basics and In Touch, On the Go are middle age (35-54) and are more likely to own a feature phone. They have a lower propensity to mobile bank and use their phones for the most basic needs of communicating with family and checking balances. Both groups use a variety of credit to manage their cash flow and they are generally not savers except for retirement or their childrens college. Cashing in on Opportunities Mobile banking provides rewarding opportunities to financial institutions who know how to connect with the right consumer groups: Drives loyaltyMobile banking creates an ongoing uniform, consistent dialogue with the customer. Banks should look to Mobile Office Workers friends to help market the benefits of mobile banking, as they are an important part of their life. Tell-a-friend and word-of-mouth programs are ways to engage with this group. Engages new segments Mobile banking opens up new groups previously underserved; unbanked, younger or out-of-footprint. Even though Country Club Communicators are not as sophisticated as their Mobile Office Worker counterparts, they have adapted in order to remain connected with their children and have a higher propensity to use SMS text messaging. Banks should create family plans that parents and children can equally take advantage of; these plans should be communicated by Country Clubs personal banker or trusted financial advisor. Empowers Mobile banking provides customers with control of their finances with real-time interaction. Mobile Basics and In Touch, On the Go tend to be at the opposite end of the mobile banking spectrum, however they still have a need to be in charge of their finances. They rank high in checking their balances and using credit to manage their cash flow. Banks should create marketing messages that stress control and offer simple SMS text message alerts for overdrafts, potential fraud and payment due dates. Offers solutions, not a product push Mobile banking creates a vehicle for offering products that customers want and need at the exact moment when they need them. Real-time response isnt easily replicated in most other channels. Regardless of the consumer mindset, this creates a positive customer experience and can be used across all groups to broaden the mobile universe.
Its hard to deny the ubiquity of the mobile phone and mobile banking is the perfect complement, and offers something for every degree of technology adoption and comfort level. SMS, mobile web and downloadable applications provide a variety of simple functionality to a higher level of sophistication that is core to delivering unique customer engagements. Its important for banks to be able to connect the banking behavior to the face and mindset of the mobile consumer to deliver a relevant and valuable user experience.
Copyright 2010 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or registered trademarks of The Nielsen Company. 10/2448