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Three-quarters of US consumers unaware of mobile banking options: KPMG

Nearly three-quarters of consumers in the United States are not aware of mobile financial services at their banks, per a KPMG report.

The analyst’s fourth annual Global Consumers and Convergence survey found that mobile banking usage more than doubled in the past 18 months, due to increasing comfort with the technology. However, banks that do offer mobile banking need to do more to inform their customers about those services.

“The fact that the majority of U.S. consumers are not aware that their current banks offer mobile banking is clearly more perception than reality,” said Charlotte, NC-based Carl Carande, principal of banking and finance advisory at KPMG. “Banks may need to work harder to increase customer awareness of the availability of mobile banking and clearly articulate the value proposition of the service.

KPMG is an audit, tax and advisory firm. It polled more than 5,600 people in 22 countries worldwide for the survey.

Survey results
Even though perceptions about the availability of mobile banking might be lagging, the sector is still increasing at a solid clip.

The number of Americans who have completed mobile banking transactions has more than doubled from 9 percent to 19 percent in the past 18 months, according to the survey.

“Mobile banking is steadily gaining acceptance among U.S. consumers, as they are becoming more comfortable with using their mobile devices for financial transactions,” Mr. Carande said.

Sixteen percent of U.S. respondents reported that they were comfortable using their mobile devices for financial transactions, up six percent from 18 months ago, per KPMG.

Additionally, the number of survey participants who were not comfortable with mobile banking transactions declined to 55 percent, down 11 points in 18 months.

“I believe this bodes well for mobile banking and believe the trend of increased usage will continue based on our survey data,” Mr. Carande said.

U.S. consumers ages 16-24 were the sector’s biggest supporters, with 33 percent indicating they conducted mobile banking from handheld devices.

And, 10 percent of respondents said they used their phones to make investments, such as buying or selling stocks, though that figure still trails the worldwide mobile investment rate of 30 percent.

The survey also found increases in all mobile payments and in mobile retail purchases.

Ten percent of U.S. consumers surveyed reported that they used a handheld device to buy something from a retailer’s mobile site, double the total from 18 months ago.

“With high mobile device penetration rates, U.S. consumers are accustomed to using the mobile channel to access data,” Mr. Carande said. “As they are growing more comfortable with using their mobile devices for financial transactions, mobile payment and mobile retail purchases are increasing.”

Security concerns hold back growth
It is no surprise that mobile banking is taking off when considering the profusion of financial institutions that now offer their services on handheld devices.

Juniper Research predicted that 400 million people will be completing banking transactions on their phones by 2013 (see story), spurred by the abundance of these services.

For example, 150 credit unions recently signed on to use Fiserv’s mobile banking and payment platform (see story).

Still, safety concerns are holding back growth in the sector.

Fifty-two perent of survey respondents who have not conducted mobile banking cited security and privacy as their main concerns, a perception that needs to be corrected before widespread acceptance occurs, according to KPMG.

“U.S. consumers – as well as worldwide – need to be convinced that new payment methods and banking vehicles are safe and secure for them to succeed,” Mr. Carande said. “Once these concerns are addressed, consumer confidence can grow and adoption could potentially increase.”

Final Take
Peter Finocchiaro, editorial assistant at Mobile Commerce Daily, New York