Surprise! Mobile-Banking Adoption Depends on Phone, Not Age

Consumers' propensity to use mobile devices to conduct banking functions depends on the sophistication of the device, not on the consumer's age, according to recent research. Indeed, mobile users equipped with iPhones or other touchscreen-enabled smart phones are far more likely to use the devices for mobile financial services than are users with ordinary cell phones or even devices with full keyboards, regardless of age, says the research, whose results were presented this week at an electronic-payments trade show in Orlando, Fla. That result flatly contradicts the expectations of many industry observers?and dumbfounded even the researchers. “It was not our mental model coming into this how much this tied out by device,” said Fred Brothers, managing partner at payments consultancy eCom Advisors, in a presentation of eCom's research at the NACHA Payments conference. But, he said, “Nothing correlated by age at all.” So surprised were Brothers and his team that they re-ran their cross-tabulation programs three times, only to arrive at the same result. “Everything correlated by device?it didn't have anything to do with age,” Brothers said. In the firm's survey, a group of 279 consumers were broken down by four age groups, mature (born from 1930 to 1945), Baby Boomers, Gen X, and Gen Y. The groups were shown photos of four types of handset, flip phones, so-called candy-bar or stick phones, non-touchscreen PDAs and smart phones, and touchscreen PDAs and smart phones. With this definition of devices, each respondent was asked about the type of phone he or she owned and his or her likelihood to use the device to perform mobile banking. Though Brothers and his colleagues expected results showing a far stronger interest among Gen Y respondents, the results indicated that mobile-banking adoption is far more likely to be driven by the availability of sophisticated handsets with touchscreens. For the entire group, 14% said they had used mobile banking in the past 30 days, with 7% doing mobile bill payments. For the group using touchscreen smart phones, however, those percentages soared to 41% and 21%, Brother said. “The device is clearly the enabling technology [for mobile banking],” Brothers told his audience, referring to iPhones and other such devices. Some smart phones are “smarter” than others when it comes to inducing mobile-banking usage. Indeed, smart phones like the iPhone are about twice as likely to stimulate mobile-banking usage than other smart phones that rely on full keyboards rather than touchscreens, Brothers told Digital Transactions News. Some banks are apparently already seeing the effects of this correlation to device. Of the 2 million customers using Bank of America Corp.'s mobile-banking service, some 41% log into the service from an iPhone, Brothers reported, though Apple Inc. only introduced the product in June 2007. The implication, said Brothers, is that as the price of touchscreen phones?and the cost of associated data plans?declines, the greater availability of the devices will drive rapid mobile-banking adoption. “This is going to happen faster than a lot of folks believe,” Brothers noted.