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Marketers must understand mobile banking consumers’ lucrative potential: report

Marketers have been missing a potentially lucrative and viable opportunity to target the emerging demographic of consumers using mobile devices for financial services and payments, suggesting that these users must be understood more fully so that banks and financial institutions can garner more clients, according to a report from Phoenix Marketing International.

More than 90 percent of banking households in the United States now tap digital channels to access their banks, with sixty percent of banking transactions conducted via online or mobile devices. However, the report suggests that this emerging breed of consumer is often times misunderstood and ineffectually targeted, leaving a missed opportunity for financial marketers.

“Mobile is today the second most frequently used channel in banking, after online,” said Augusto Medelius, vice president of global at Phoenix Marketing International, New York. “The primary use of mobile in banking is to check the account balance, followed by payment of bills.

“The simple, habitual and recurring nature of these transactions makes mobile a good fit for them. However, online is used significantly more than mobile for both of these transaction types – four times more for checking the account balance, and six times more for paying bills,” he said.

“In addition, mobile has gained some traction in check deposits but ranks third in preference behind the branch (four times more favored) and the ATM (two times more favored).”

The mP2P consumer
Phoenix Marketing International’s report pinpoints the rise of the mP2P consumer: mobile device users of payments and other financial services who also have downloaded their primary bank’s app and engage in face-to-face payments. The company claims that over 15 million households in the United States fall under this umbrella.

These types of consumers are 60 percent more likely to garner more than $100,000 household income annually, and are 300 percent more likely to hold the status of business owner.

More importantly, two out of each three consumers are at least 33 years old, proving that banks must also target demographics other than millennials on mobile.

What marketers must keep in mind is that mP2P customers are not exclusively dedicated to mobile, however; they frequent all banking channels and transact at rates more than twice the amount of full market consumers.

“This should be a blend of product enhancements in conjunction with compatibility, connectivity and ease of use considering a bank’s entire ecosystem,” said Leon Majors, president of Phoenix Marketing International, Dover, DE.

“On product enhancements it will further facilitate deposits of checks and bill payment. Don’t seek to replace online banking for bill payment (consumers won’t drop this), better to complement, authenticate, verify, secure, etc. than trying to dethrone online.”

Financial institutions should ensure that they offer streamlined, fast ways of conducting transactions and other services for these on-the-go guests.

Mobile performance
The key takeaway of the study is to ensure that mobile performance remains high, especially as it is integrated across other mediums.

This new demographic is shown to overwhelmingly gravitate towards mobile for check deposits, while others prefer to visit branches in-person. MP2P consumers also use digital channels more frequently for bill paying.

Perhaps most importantly, banks should consider that these types of clients seek mobile and online availability as a top factor when selecting a new primary bank. They also prefer that mobile performs comparatively to ATMs, online and branch services.

“On system-wide enhancements, ensure that performing mobile transactions is consistent and compatible with performing the same activity through other channels,” Mr. Majors said. “Banking consumers don’t want to see themselves dealing with new menus, screens, processes when using mobile.”

Ultimately, information must be consistent across all channels.

2015 is also likely to become a big year for mobile banking, with several trends at play.

“PFM-like features—e..g, budgeting, expense categorization, expense analysis, and spend forecasting—will increasingly become part of banks’ mobile banking apps,” said Ron Shevlin, senior analyst at Aite Group, Atlanta, GA. “In addition, shopping-related apps—i.e., apps that help consumers manage the home and car shopping processes (leading to the loan and insurance opportunities) will become popular, as well.”

Final Take
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York