Federal Reserve Board’s second survey on Consumers and Mobile Financial Services posted, Smartphone
As part of the Federal Reserve Board’s (FRB) efforts to monitor developments in consumers’ usage and attitudes toward mobile financial services, the FRB conducted its second consumer study in November 2012 (the first was conducted in December 2011). The report was published on March 27 2013,
and indicates the use of mobile phones to access a bank account, credit card, or other financial account became more prevalent in the United States last year. As of November 2012, 28% of all mobile phone users and 48% of smartphone users had used mobile banking in the last 12 months. This is up from 21% and 42% respectively one year earlier. However, consumers reported less confidence in the security of mobile banking and payments technology in the 2012 survey than they did in the 2011 survey.
Mobile services are particularly prevalent among the “unbanked” or “underbanked”, which are those consumers who have banking accounts but also use alternative financial services such as a payroll card, payday lender or check casher. Ninety-percent of this group had mobile phones, and among them, 49% used mobile banking during the 2012 period, up from 29% in 2011. Among the unbanked consumers, the most commonly cited reason for not having an account was simply not needing or wanting one (23%).
According to CUNA’s compliance blog from March 27, 2013 the NCUA is particularly concerned by the operational risks triggered by new technology (online banking, remote deposits, mobile banking, social media, etc.). Credit unions should expect an NCUA Letter to Credit Unions in the next few months on “eBanking”.
In summary, as identified in the FRB’s report, mobile banking continues to be an important member service tool and will also be useful in attracting the “unbanked” or “underbanked”. Credit unions utilizing this product and those credit unions considering entering the market should be cognizant of compliance issues, looking out for the NCUA Letter to Credit Unions mentioned above and also looking at existing regulations to see how they apply to mobile banking.
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. Shawn Glinis is the editor of Monitor and can be reached at 800-262-6285, ext. 449. The newsletter of the Michigan Credit Union League is published Monday mornings or Tuesday mornings when Monday is a holiday. There is no Monitor the week after Christmas and the week after the Annual Convention and Exposition. MCUL reserves the right to edit submissions for clarity and space.