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2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
S ep te mb e r201 0
T+19252259100F+192522591014301HaciendaDr.Pleasanton,CA94588USAinquiry@javelinstrategy.comwww.javelinstrategy.com
SyndicatedSampleReport
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
Audience:
Overview
Financialinstitutions:Mobilebanking,marketing;
mobilebankingvendors,mobilepayment
vendors,mobilenetworkoperators,handset
equipmentmanufacturers,authentication
technologyvendors,authenticationplatform
vendors
Authors:
institutions(FIs)andmobilevendorshadanticipated,yetthe
evolutionofsmartphonefunctionalitycoupledwith
consumersincreasingadoptionofsmartphonesgivesmobile
bankingthechancetoliveuptoexpectations.Optimistic
MaryMonahan,ManagingPartnerandResearch
Director
DanielleMiceli,AssociateAnalyst
Contributors:
PublicationDate:
Price:
Length:
indicatorssuchasbetterdataplans,marketingeffortsfrom
financialinstitutions,mobilecapabilities,diminishingcarrier
dependencyandcontinuingsmartphonetrendswillhelpdrive
mobilebankingadoption.Javelinpredictsthatsmartphone
AlRaby,Consultant
AlanRuperto,MobileAnalyst
JohnKenderski,AssociateAnalyst
Mobilebankinghasnotevolvedtotheextentthatfinancial
September2010
penetrationwillcontinueatarampantpace,thusspurring
highermobilebankingnumbers.Bothmobilebankersand
smartphoneownerswillsteadilyincreasethrough2015,
despitecurrenteconomicconditionsandslowermobile
bankingadoptionratesin2010.
$1,500
37pages
27charts/graphs
PrimaryQuestions
Whatwillmobilebankingadoptionlooklikeandhow
quicklywillittakeoff?
Atwhatratewillsmartphoneadoptioncontinue?
Whichsmartphonesaremostpopular,andwhichwill
havethebiggestimpactonmobilebanking?
Whatarepotentialroadblocksforconsumerswho
havenottriedmobilebanking,andwhatcan
financialinstitutionsdotominimizethem?
Whatarethekeydriverstomobilebanking
adoption?
Howshouldbanksandcreditunionsposition
themselvestosucceedasmobilebanking
institutions?
WhatchangescanFIsexpect,andhowwill
consumersuseofmobilebankinggrowinthenext
fiveyears?
T+19252259100F+192522591014301HaciendaDr.Pleasanton,CA94588USAinquiry@javelinstrategy.comwww.javelinstrategy.com
SyndicatedSampleReport
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
Methodology
ThisreportisbasedprimarilyondatacollectedonlineintheUnitedStatesfromarandomsamplepanelof3,100respondentswith
mobilephonesinJuly2010,withanoverallmarginofsamplingerrorof1.79percentagepointsatthe95%confidencelevel.
Thisreportisalsobasedondatacollectedonlinefromarandomsamplepanelof5,211U.S.householdsinMarch2010.Thesurvey
targetedrespondentsbasedonrepresentativeproportionsofgender,ageandincomecomparedtotheoverallU.S.onlinepopulation.
Overallmarginofsamplingerroris1.36%atthe95%confidencelevel.
Additionally,thisreportincludesdatacollectedonlinefromarandomsamplepanelof2,779respondentsinApril2009,withanoverall
marginofsamplingerrorof1.86percentagepointsatthe95%confidencelevel.
Italsoincorporatesthe2009and2010MobileBankingScorecards,whichreviewedthetop18and19financialinstitutionsoffering
customerfacingmobilebankingservices(outofthetop40and30financialinstitutions,respectively,bydepositbase).
Thesurveystargetedrespondentsbasedonrepresentativeproportionsofgender,age,incomeandethnicitycomparedtotheoverall
U.S.onlinepopulation.
Rounding(intheunderlyingnumbers)inchartsaccountsfortheslightdifferencesinpercentages.
ThemajorityofJavelindataforonlinebankingfinancialalertsisbasedononlinehouseholdsvs.individualconsumers.Thisisatypical
wayofpresentingonlinebankingdatabecauseaccountmanagementistypicallycollectedonaperhouseholdbasis.In2009,theU.S.
populationwasestimatedtocomprise310millionpeople.1Thatnumberincludes232millionadults,118millionhouseholdsand87
millionhouseholdsthatareonline.Onaverage,thereareabout2.6peopleperhousehold.Javelinalsocollectsonlinebankingdatausing
abaseofallconsumersforcomparisonpurposes.
http://www.census.gov/population/www/projections/2009projections.html
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SyndicatedSampleReport
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
DefinitionsUsedinReport
Figure1definesthetermsthisreportusesinbanking.
JavelinsDefinitionsRelatedtoMobileBanking
Figure1:DefinitionsUsedinMobileBankingandSmartphoneForecastReport
Term
Definition
Smartphone
Amobiledevicewithphone,emailandwebaccesscapabilitieswithwhich
applicationscanbeinstalled,suchasAndroid,AppleiPhone,BlackBerryand
WindowsMobile
Featurephone
Astandardflipphone
Mobilebanking
Aservicethatallowsconsumerstomonitororreviewtheiraccountsontheir
mobilephones.Theservicecanbeofferedthroughtextmessaging,
downloadableapplications,preloadedapplications,orthemobileweb
Regularmobilebanker
Activemobilebanker
Highlyactivemobilebanker
Earlyadopter
Aconsumerwhohasusedmobilebankinginthepast90days
Aconsumerwhohasusedmobilebankinginthepast30days
Aconsumerwhohasusedmobilebankinginthepast7days
Aconsumerwhoisselfdescribedasthefirsttotryanewtechnologywhenit
becomesavailable
2010JavelinStrategy&Research
Figure2illustratesJavelinstripleplayapproachtomobilebanking.ItincorporatesaccessviaInternetbrowsers,downloadable
applicationsandshortmessageservice(SMS).
JavelinsTriplePlayIstheBestStrategytoImplementMobileBanking
Figure2:TriplePlayApproachtoMobileBanking
SMS/TEXT
APPLICATION
MOBILEBROWSER
Step3
Step2
Step1
TriplePlaySteps
2010Ja velinStra tegy&Research
T+19252259100F+192522591014301HaciendaDr.Pleasanton,CA94588USAinquiry@javelinstrategy.comwww.javelinstrategy.com
SyndicatedSampleReport
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
TableofContents
Overview.......................................................................................................................................................................................4
PrimaryQuestions...........................................................................................................................................................4
Methodology.................................................................................................................................................................................5
DefinitionsUsedinReport..............................................................................................................................................6
ExecutiveSummary.......................................................................................................................................................................7
Recommendations........................................................................................................................................................................9
MobileBankingForecast.............................................................................................................................................................10
SmartphoneForecast..................................................................................................................................................................12
GooglesAndroidvs.ApplesiPhonevs.RIMsBlackBerry:Outlookfor2011..............................................................13
RoadblocksHinderingMobileBankingRates..............................................................................................................................15
1.MobilePhonePenetrationDropswiththeEconomy...............................................................................................15
2.ConsumersMisstheCurrentValueProposition.......................................................................................................16
3.ConcernAboutSecurityRemainsaStumblingBlock.................................................................................................18
4.SupplySideOfferingsMismatchtheDemandsforMobileBanking.........................................................................19
5.MarketingandMessagingEffortsAreStillLagging...................................................................................................21
MobileBankingDrivers...............................................................................................................................................................22
1.SmartphoneAppsZeroInontheMostInfluentialMobileBankers..........................................................................22
2.Smartphone/FeaturePhoneCrossoverAccelerates.................................................................................................24
3.FIsTargetMobileBankingsPowerUsers.................................................................................................................26
4.AdvertisingCampaignsforMobileBankingThatAreWorking.................................................................................28
5.BetterDataPlansandMobileNetworkOperatorConsolidationNowAvailable......................................................29
Appendix.....................................................................................................................................................................................31
RelatedResearch.........................................................................................................................................................................34
CompaniesMentioned................................................................................................................................................................37
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SyndicatedSampleReport
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
TableofFigures
Figure1:DefinitionsUsedinMobileBankingandSmartphoneForecastReport.........................................................................6
Figure2:TriplePlayApproachtoMobileBanking........................................................................................................................6
Figure3:JavelinsFiveYearForecastofMobileandMobileBankingUsers,20082015..........................................................10
Figure4:JavelinsFiveYearForecastofMobileBankingAdoption,20082015........................................................................11
Figure5:JavelinsFiveYearForecastofAdultSmartphoneUsers,20082015.........................................................................12
Figure6:ConsumerAdoptionofSmartphonePlatforms,2010vs.2009....................................................................................13
Figure7:SmartphoneForecastfor2011byType.......................................................................................................................14
Figure8:MobilePhoneOwnershipbyU.S.Adults,March2008toMarch2010........................................................................15
Figure9:ReasonsConsumersDoNotUseMobileBanking,2010and2009..............................................................................16
Figure10:HouseholdsPreferenceforMobileRemoteDepositCapturebyiPhones,AllSmartphones,andAllConsumers....17
Figure11:ConsumersPerceptionsoftheSafetyofMobileBanking.........................................................................................18
Figure12:ConsumersUseofVariousModesofAccesstoMobileBanking,2009vs.2010......................................................19
Figure13:PrimaryMethodsConsumersUsetoConductMobileBanking.................................................................................20
Figure14:ComparisonofVariousMobileBankingAccessModes.............................................................................................21
Figure15:MobileBankersinthePast90DaysbyPhoneType..................................................................................................22
Figure16:FinancialInstitutionProvidedAccessModesforMobileBanking,20082010.........................................................23
Figure17:Smartphonevs.FeaturePhonePenetration..............................................................................................................24
Figure18:LikelihoodThatConsumersWillPurchaseaSmartphoneasTheirNextMobileDevice............................................25
Figure19:MobileBankersinthePast90DaysbySmartphoneType.........................................................................................26
Figure20:MobileBankersinthePast90DaysbyHeaviestUserGroups..................................................................................27
Figure21:BankofAmericasMobileBankingProductonItsWebsite.......................................................................................28
Figure22:WirelessPlansofSmartphoneOwnersandAllConsumers.......................................................................................29
Figure23:ConsumerWirelessProviders,20092010................................................................................................................30
Figure24:TopThreeSellingMobilePhonesoftheTopFourCarriers,Q32010........................................................................30
Figure25:U.S.UnemploymentRates,20082010.....................................................................................................................31
Figure26:MobileBankersinthePast90Days...........................................................................................................................32
Figure27:SmartphoneandFeaturePhoneOwnersbyMobileBankersandAllConsumers.....................................................33
T+19252259100F+192522591014301HaciendaDr.Pleasanton,CA94588USAinquiry@javelinstrategy.comwww.javelinstrategy.com
SyndicatedSampleReport
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
CompaniesMentioned
CompaniesMentioned
Apple
RIM
AT&T
Sprint
BankofAmerica
TMobile
Barclays
Tracfone
BoostMobile
USCellular
Discover
USAA
Verizon
JPMorganChase
VirginMobile
MetroPCS
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2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
MOBILEBANKINGFORECAST
By2015,203millionpeoplewillbemobilephoneusers,138
struggledtocopewithnewregulatoryrequirementsand
millionwillbesmartphoneownersand86millionwillbemobile
shrinkingmargins.Therapidlygrowingsmartphonemarket(68%
bankers(seeFigure3).Mobilebankingisprojectedtoincrease
CAGRfrom2008to2010)willbringmobileInternetaccessto
atamoremodestbuthealthy21%CAGRoverthenextfive
moreconsumers.Conversely,mobilephonepenetrationoverall
years.Duringtherecessionaryyearfrom2009to2010,manyFIs
willremainrelativelyflatasthemobiledividebetweenricher
putonholdtheirinvestmentsinmobiletechnologyasthey
andpoorerconsumerswidens.
E
G
A
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L
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SA
MobileBankingPausedin2010butWillResumeGrowthin2011
Figure3:JavelinsFiveYearForecastofMobileandMobileBankingUsers,20082015
250
200
150
100
50
24
2008
2009
Actual
2010
2011
2012
2013
2014
2015
Forecast
Base: US adults with mobile phone.
2010 Javelin Strategy & Research
Copyright2010JavelinStrategy&Research.Allrightsreserved.Itisprotectedbycopyrightandotherintellectualpropertylaws.Youmaydisplayorprintthecontentavailable
foryouruseonly.Youmaynotsell,publish,distribute,retransmitorotherwiseprovideaccesstothecontentofthisreport.
10
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
ROADBLOCKSHINDERINGMOBILEBANKINGRATES
Thefollowingsectionsdiscussfivefactorspreventingfaster
currently,68%oftheU.S.mobilephonemarketiscomposedof
growthinU.S.mobilebanking.
featurephones.Thelowernumberofconsumerswithmobile
handsetsdirectlyaffectsthetotalmarketpotentialofmobile
1.MobilePhonePenetrationDropswiththe
Economy
bankingandchallengesFIstoincreasethenumberofmobile
bankersfromasmalleraccessiblepopulation.
Mobilephoneadoptionfelldramaticallyfrom85%in2009to
Thelongitudinalpatternofconsumerdataplanpurchasesshows
74%in2010,as26millionnetconsumersgaveuptheirmobile
thatthisdecreasehasmostaffectedconsumerswithprepaid
phones(seeFigure8).Thesecondyearofatroublingeconomic
plans;thatis,consumersatthelowerincomelevels.Twentysix
recessionandhighunemploymentratescontributedtoa
E
G
A
P
E
L
P
M
SA
percentoftheunderbankedhaveusedmobilebankinginthe
cautiouscutbackbyconsumersandbusinesses.Inthepastyear,
pastyear,comparedwith18%ofallconsumers,andthe
unemploymentsoaredfrom7.4%to9.5%asthenumberof
underbankedaremorewillingtobecomeactivemobilebankers
discouragedworkers(excludedfromunemploymentnumbers)
andtouseSMS.9Thewidevarietyofconsumersdesiringmobile
grewto2.6million.8(RefertoFigure25,Appendix.)Thedipin
accessunderliestheimportanceofJavelinstripleplayapproach
mobilephonepenetrationissomewhatoffsetbytheincreasing
andhighlightsthecausalityofmobilebankingstagnationfrom
numberofsmartphonesbutisnonethelessanegativefactor;
decreasedmobilephonepenetration.
MobilePenetrationAmongConsumersSuffersEconomicSetback
Figure8:MobilePhoneOwnershipbyU.S.Adults,March2008toMarch2010
195
100%
200
195
95%
190
90%
185
85%
85%
180
85%
174
175
80%
170
74%
160
70%
2008
Q51:Pleasetakealookatthelistofproductsandservicesbelow.
Pleasechecktheboxesnexttotheproductsandservicesthatyou
personallyownanduse.(Selectallthatapply)
8
9
75%
165
PercentofU.S.Adultswhouseamobile phone
U.S.Adultswhouseamobile phone(inmillions)
200
2009
2010
March 2010 ,2009 ,2008 ,n=5,211,2,779,2,350
Base:Allconsumers.
2010 JavelinStrategy&Research
http://www.dailyfinance.com/story/careers/whatistherealunemploymentrate/19556146,AccessedAugust27,2010.
EngagingtheUnderbankedandUnbankedintheU.S.:HowtoTargettheGrowingImmigrantPopulationthroughMobileFinancialServices,JavelinStrategy&Research,April2010.
Copyright2010JavelinStrategy&Research.Allrightsreserved.Itisprotectedbycopyrightandotherintellectualpropertylaws.Youmaydisplayorprintthecontentavailable
foryouruseonly.Youmaynotsell,publish,distribute,retransmitorotherwiseprovideaccesstothecontentofthisreport.
15
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
2.Smartphone/FeaturePhoneCrossover
Accelerates
featurephonesareonthedecline:downto66%thisyearfrom
In2011,therewillbeacrossoverofownershipratesof
consumerswithmobilephonesin2010.Giventheincreasein
82%in2009and88%in2008,accountingfor115million
ownershipofsmartphonesanddecreaseinownershipoffeature
smartphonesandfeaturephonesintheU.S.,supportingthe
phones,withinayear,thenumberofsmartphoneusersis
needforandincreasingpredictionsformobilebankingadoption
forecasttoovertakethenumberoffeaturephoneusersinthe
(seeFigure17).Themobilephonemarketisnowcomposedof
U.S.
34%smartphoneownership,upsharplyfrom18%in2009and
12%in2008,revealinganaggressiveCAGRof68%.Incontrast,
SmartphoneAdoptionWillSurpassFeaturePhoneAdoptionbyYearend2011
Figure17:Smartphonevs.FeaturePhonePenetration
100%
90%
88%
80%
82%
70%
A
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SA
60%
66%
60%
GE
66%
68%
70%
52%
50%
48%
40%
34%
40%
34%
30%
32%
30%
18%
20%
12%
10%
0%
2008
2009
2010
2011
2012
2013
2014
2015
Copyright2010JavelinStrategy&Research.Allrightsreserved.Itisprotectedbycopyrightandotherintellectualpropertylaws.Youmaydisplayorprintthecontentavailable
foryouruseonly.Youmaynotsell,publish,distribute,retransmitorotherwiseprovideaccesstothecontentofthisreport.
24
SyndicatedSampleReport
2010MobileBankingandSmartphoneForecast:
FastGrowingSmartphoneMarketWill
OffsetLostMomentuminMobileBanking
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