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Contents
Report homepage
Contents
Scope and Themes
Executive Summary
Insights and Opportunities
Inspire Insights
Market Size—Online Banking
Market Size—Mobile Banking
Segment Performance—Online and Mobile Banking
Market Drivers—Mobile Banking
Competitive Context—Mobile Payments
Leading Companies
Innovation and Innovators
Marketing Strategies
The Consumer
Cluster Analysis, Part 1
Cluster Analysis, Part 2
Appendix: Trade Associations
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Online and Mobile Banking - US - November 2010
Table of Contents

Scope and Themes

Executive Summary

Online banking—industry overview

Mobile banking—industry overview

Competitive context—mobile payments

Innovations and innovators

Marketing strategies

The consumer

Insights and Opportunities

Lack of internet access, smartphones stymie mobile banking growth

Don’t ignore offline customers as mobile banking users

Figure 1: Cost per transaction, by banking channel, November 2009

Mobile banking may be route to unbanked consumers

Hispanics have taken to mobile banking more than others

Figure 2: Types of banking activities conducted on mobile phones—Hispanics vs. non-Hispanics, July/August 2010

Inspire Insights

Text Me and I’ll Save More

What’s it about?
Implications

Market Size—Online Banking

Key points

Some 80% of U.S. households use online banking services

Figure 3: Percentage of population using online banking and bill payment, 2010
Figure 4: Growth in internet use and online banking and bill pay, 2000-10

Bill payment methods change dramatically

Figure 5: Methods used for bill payments, 2010
Figure 6: Methods used for bill payments, 2000

Number of online bill payments jumps 50%

Figure 7: Total transaction volume for online bill payments, 2000 versus 2010

Banks need to get online customers to do more

Market Size—Mobile Banking

Canadian Mobile Payments - US - May 2012 -

Key points

Figure 8: Smartphone users who use mobile banking, 2009 and 2010
Figure 9: Percent of customers who expect to bank by phone in the near future, July 2010

Bank of America customers are most active phone users

Figure 10: Percentage of customers at major banks who bank by phone, July 2010

Segment Performance—Online and Mobile Banking

Key points

Online banking is the preferred method

Mobile banking hasn’t caught on yet

Figure 11: Preferred banking channel, 2009 and 2010

Market Drivers—Mobile Banking

Key points

Switch to smartphones will drive more mobile banking

Figure 12: Projected share for smartphones vs. feature phones, Q2 2008-Q2 2011

Weak economy, consumer finances also drive mobile banking use

Figure 13: Number of online households using each payment method, in millions, January 2010

Competitive Context—Mobile Payments

Key points

Mobile payments triple in U.S. in 2009, but lag behind other countries

Replacing cash, not plastic

Demand-side issues: The chicken and egg problem

Supplyside issues: The search for a mobile payment standard

Who pays for all this?

Leading Companies

Key points

Bank of America

JPMorgan Chase

Citigroup

Wells Fargo

U.S. Bank

PNC Financial Services

SunTrust

Capital One

USAA

TD Bank

BBVA Compass

Online-only banks

ING Direct

Discover Bank

American Express

Ally Bank

Charles Schwab Bank

E-LOAN

E*TRADE

SmartyPig

PayPal

Innovation and Innovators

Key points

First Data gears up to offer E-wallets in U.S., Canada and Mexico

Mobile giants team with banks to develop smartphones for payments

Citigroup tests shopping app tied to its credit cards

Cimbal launches barcode mobile payment system

Startup offers individualized 3D barcodes for mobile advertisers

Figure 14: Example of a 3D “Bar Page Cube” from Bar Pages

Shopkick app transmits rewards, discounts to in-store mobile users

Deposit@Mobile and Auto Circle from USAA

Quick Deposit and QuickPay from JPMorgan Chase

Quick Payment by Bank of America

BBVA Compass Alliance with SmartyPig

Paperless ATM receipts from Wells Fargo

Cloud Computing for Mortgage Originations

Marketing Strategies

Key points

Notable direct mail, print and email advertising

Figure 15: Bank of the West direct mail ad, August 2010
Figure 16: Regions Bank email ad, May 2010
Figure 17: PNC acquisition direct mail ad, August 2010
Figure 18: ING acquisition direct mail ad, September 2010
Figure 19: SunTrust Bank direct mail ad, April 2010
Figure 20: Harris Bank direct mail ad, April 2010
Figure 21: BBVA Compass direct mail ad, March 2010
Figure 22: Bank of America direct mail ad, January 2010
Figure 23: Citizens RBS direct mail ad, August 2010
Figure 24: Banco Popular direct mail ad, September 2010

Television advertising

Figure 25: Bank of America, February 2010
Figure 26: Bank of America, January 2010
Figure 27: Bank of America, October 2009
Figure 28: JPMorgan Chase, April 2010
Figure 29: JPMorgan Chase, July 2010
Figure 30: PNC Bank, July 2010

The Consumer

Checking balances is most common online activity; bill pay ranks third

Figure 31: Types of banking activities conducted online, by gender, July/August 2010

Age and online banking

Figure 32: Types of banking activities conducted online, by age, July/August 2010

Online banking and income

Figure 33: Types of banking activities conducted online, by household income, July/August 2010
Figure 34: Types of banking activities conducted online, by gender and household income, July/August 2010

Asians are the most frequent online bankers

Figure 35: Types of banking activities conducted online, by race/Hispanic origin, July/August 2010

Interest in online banking varies by region

Figure 36: Types of banking activities conducted online, by census region, July/August 2010
Figure 37: Types of banking activities conducted online, by area, July/August 2010

Frequency of visits to online banking websites

Figure 38: Frequency of visits to banking websites, by gender and age, June 2010
Figure 39: Frequency of visits to banking websites, by household income, June 2010

Proportion of bills paid online by all bill payers

Figure 40: Proportion of bills paid online, by gender and age, June 2010
Figure 41: Proportion of bills paid online, by household income, June 2010

Online security is still an issue for many

Figure 42: Reasons for not conducting internet banking activities, by gender, July/August 2010

Online banking and age

Figure 43: Reasons for not conducting internet banking activities, by age, July/August 2010

Lack of internet access hinders mobile banking adoption

Figure 44: Reasons for not conducting mobile banking activities, by gender, July/August 2010

Mobile banking and age

Figure 45: Reasons for not conducting mobile banking activities, by age, July/August 2010

Mobile banking and income

Figure 46: Reasons for not conducting mobile banking activities, by household income, July/August 2010

Mobile banking and race/Hispanic origin

Figure 47: Reasons for not conducting mobile banking activities, by race/Hispanic origin, July/August 2010

Younger cohorts, Asians, and Hispanics are most eager to use mobile

Figure 48: Types of mobile banking activities conducted, by gender, July/August 2010

Younger people more eager to embrace mobile banking

Figure 49: Types of mobile banking activities conducted, by age, July/August 2010

Higher-income consumers more apt to use mobile banking

Figure 50: Types of mobile banking activities conducted, by household income, July/August 2010

Blacks, Asians take to mobile banking faster

Figure 51: Types of mobile banking activities conducted, by race/Hispanic origin, July/August 2010

Urban dwellers outpace rural residents in mobile

Figure 52: Types of mobile banking activities conducted, by area, July/August 2010

Consumers want free bill payment and checking with internet banking

Figure 53: Most desirable features of online banking services, by gender, July/August 2010
Figure 54: Most desirable features of online banking services, by age, July/August 2010
Figure 55: Most desirable features of online banking services, by household income, July/August 2010

Bank visits increase with income, higher number for some races/ethnicities

Figure 56: Average number of visits per month to branch or CSR, by gender, July/August 2010
Figure 57: Frequency of visits to bank branch or CSR, by gender, July/August 2010
Figure 58: Frequency of visits to a bank branch or CSR, by age, July/August 2010

Higher-income consumers make most bank visits

Figure 59: Average number of visits per month to branch or CSR, by household income, July/August 2010
Figure 60: Frequency of visits to a bank branch or CSR, by household income, July/August 2010

Blacks favor branch visits over whites

Figure 61: Average number of visits per month to branch or CSR, by race/Hispanic origin, July/August 2010
Figure 62: Frequency of visits to bank branch, by race/Hispanic origin, July/August 2010

Northeasterners are heaviest branch visitors

Figure 63: Average number of visits per month to branch or CSR, by census region, July/August 2010

ATM usage varies widely by gender, age, income and race

Figure 64: Frequency of visiting an automated teller machine, by gender, July/August 2010
Figure 65: Frequency of visiting an automated teller machine, by gender, July/August 2010

ATM visits decline with age

Figure 66: Frequency of visiting an automated teller machine, by age, July/August 2010
Figure 67: Frequency of visiting an automated teller machine, by age, July/August 2010

Higher-income consumers, especially men, make most ATM visits

Figure 68: Frequency of visiting an automated teller machine, by household income, July/August 2010
Figure 69: Frequency of visiting an automated teller machine, by household income, July/August 2010
Figure 70: Frequency of visiting an automated teller machine, by gender and household income, July/August 2010

Blacks are most frequent ATM users

Figure 71: Frequency of visiting an automated teller machine, by race/Hispanic origin, July/August 2010
Figure 72: Frequency of visiting an automated teller machine, by race/Hispanic origin, July/August 2010

Coastal, urban dwellers make most ATM visits

Figure 73: Frequency of visiting an automated teller machine, by census region, July/August 2010
Figure 74: Frequency of visiting an automated teller machine, by census region, July/August 2010
Figure 75: Frequency of visiting an automated teller machine, by area, July/August 2010
Figure 76: Frequency of visiting an automated teller machine, by area, July/August 2010

Income indicates where consumers bank

Figure 77: Type of institution for online bank account, by gender, July/August 2010
Figure 78: Type of institution for online bank account, by age, July/August 2010
Figure 79: Type of institution for online bank account, by household income, July/August 2010
Figure 80: Type of institution for online bank account, by gender and household income, July/August 2010

E-bills—what consumers think

Figure 81: Familiarity with e-bills, by gender and age, June 2010
Figure 82: Bank offers e-bills, by gender and age, June 2010
Figure 83: Usage of e-bills, by gender and age, June 2010
Figure 84: Reasons for not using e-bills, by gender and age, June 2010

Cluster Analysis, Part 1

Mobiles

Demographics
Characteristics
Opportunity

Computerizers

Demographics
Characteristics
Opportunity

Potentials

Demographics
Characteristics
Opportunity

Cluster characteristics

Figure 85: Online and mobile banking clusters, July/August 2010
Figure 86: Banking activities conducted online on a computer, by online and mobile banking clusters, July/August 2010
Figure 87: Banking activities conducted online on a mobile phone, by online and mobile banking clusters, July/August 2010
Figure 88: Desired features for online banking, by online and mobile banking clusters, July/August 2010

Cluster demographics

Figure 89: Online and mobile banking clusters, by gender, July/August 2010
Figure 90: Online and mobile banking clusters, by age, July/August 2010
Figure 91: Online and mobile banking clusters, by household income, July/August 2010
Figure 92: Online and mobile banking clusters, by race/Hispanic origin, July/August 2010
Figure 93: Online and mobile banking clusters, by Hispanic origin, July/August 2010

Cluster methodology

Cluster Analysis, Part 2

Dabblers

Demographics
Characteristics
Opportunity

The Unconcerned

Demographics
Characteristics
Opportunity

Privatizers

Demographics
Characteristics
Opportunity

Cluster characteristics

Figure 94: Online financial marketing clusters, July/August 2010
Figure 95: Advantages to using the internet for investment research, by online financial marketing clusters, July/August 2010
Figure 96: Disadvantages to using the internet for investment research, by online financial marketing clusters, July/August 2010
Figure 97: Important features when purchasing financial products online, by online financial marketing clusters, July/August 2010
Figure 98: Changes that financial companies can make to help respondents feel more secure about their purchase, by online financial marketing clusters, July/August 2010

Cluster demographics

Figure 99: Online financial marketing clusters, by gender, July/August 2010
Figure 100: Online financial marketing clusters, by age, July/August 2010
Figure 101: Online financial marketing clusters, by household income, July/August 2010
Figure 102: Online financial marketing clusters, by race, July/August 2010
Figure 103: Online financial marketing clusters, by Hispanic origin, July/August 2010

Cluster methodology

Appendix: Trade Associations