Bank Switching In 2012: Giant Banks Remain Highly Vulnerable as Customers Weigh Fees and Convenience
- Language: English
- 31 Pages
- Published: June 2012
The underbanked population — those without a checking account and often without a primary financial institution relationship — relies upon the mobile phone to engage in robust mobile transacting. This propensity makes the “mobile underbanked” a prime target for mobile banking, mobile prepaid, and mobile money P2P transfer solutions. Emerging vendors are leveraging the underbanked's consumer profile to provide transfer solutions, while recent government regulations have made this segment both less profitable and more crucial to FIs. This report makes use of consumer data and qualitative analysis to create targeted strategies and best practices for developing mobile products and marketing initiatives to bring financial inclusion to underbanked and unbanked consumers in the context of this developing market.
- Who are the unbanked and underbanked? How are they defined? How do they differ from other consumers?
- What is the transformative vs. additive approach to mobile banking?
- What is the annual dollar size of the global and U.S. remittance market? How is the remittance market being transformed?
- What are the opportunities and threats for financial services providers to the underbanked and unbanked?
- What mobile financial products and services are attractive to the unbanked and underbanked, and how should they be structured?
- How does mobile adoption compare to online adoption among the unbanked and underbanked? What factors are holding back the underbanked from adopting mobile banking?
Why do I need this Research Report?
- The underbanked are not a one-size-fits-all target market. Detailed demographic segmentation of this young and highly mobile consumer segment would aid in your marketing efforts.
- FIs are not in a strong position to serve underbanked consumers with high mobile behaviors. Underbanked consumers need customization in marketing to their needs, including ethnic and cultural sensitivity, extended hours of service and access to the mobile financial services they need such as mobile banking and P2P transfers.
- New payment vendors have a strong competitive edge with this target market, as underbanked rely on simple prepaid accounts, which are forecasted to grow over the next five years.
Financial institutions: online banking, mobile banking, marketing, credit card networks, credit card issuers, payment processors, mobile banking vendors, mobile payment vendors, mobile network operators, handset equipment manufacturers, authentication technology vendors, authentication platform vendors.
This report is based mainly on data collected online from 3,180 consumers with mobile phones or smartphones in June 2011. The overall margin of sampling error is ±1.74 percentage points at the 95% confidence level.
This report is also based on data collected online from 3,210 consumers in October 2011. The overall margin of sampling error is ±1.73 percentage points at the 95% confidence level.
In addition, this report is based on data collected online from 5,304 respondents who are primary and shared financial managers in March 2012. The overall margin of sampling error is ±1.38 percentage points at the 95% confidence level. SHOW LESS READ MORE >
Defining the Underbanked and Unbanked Consumer
Definitions and Market Sizing
Executive Summary and Recommendations
Who Are the Underbanked and Unbanked?
Products and Services Used by the Underbanked
Online Banking vs Mobile Banking Rates
Transformational vs Additive Approach to Mobile Banking
The Underbanked and Global Remittance Flows
The Transition to Mobile Money Transfers
How Account Fees Affect the Underbanked
Prepaid as a Logical First Step
How to Structure Mobile
Banking for the Underbanked
Tech-Advanced vs Tech-Challenged
Access for Mobile Banking Through SMS Text, Browsers, or Apps?
Mobile Remote Deposit Capture
The Use of Automated Systems
Alerts as Safety Net
Mobile Bill Pay
Table of Figures
Figure 1: Who Are the Underbanked in the US?
Figure 2: What Products Do the US Underbanked Own?
Figure 3: Device Ownership by Mobile Underbanked vs All Mobile Consumers
Figure 4: Landline and Mobile Phone Ownership by Unbanked, Underbanked, and All Consumers
Figure 5: Last Used Online Banking by Underbanked vs All Consumers
Figure 6: Last Used Mobile Banking by Underbanked vs All Consumers
Figure 7: Transformational vs Additive Approach to Mobile Banking
Figure 8: Global Remittance Flows in 2011
Figure 9: Wire Transfers and Transfers Using a Service Such as Western Union by Underbanked and All Consumers
Figure 10: Likelihood to Use Domestic and International Mobile P2P Transfers by Underbanked and All Mobile Consumers
Figure 11: P2P and Other Bank Transfers Past 90 Days by Underbanked and All Consumers
Figure 12: Average Monthly Fee for Basic Checking by Bank Asset Category, 2012
Figure 13: Top-of-Wallet Payment Options for Underbanked vs All Consumers
Figure 14: New Technology Attitudes of the Underbanked vs All Consumers
Figure 15: Method Used to Conduct Mobile Banking by Underbanked and All Mobile Consumers
Figure 16: Financial Activities (eg, Money Orders, Expedited Payments, Mobile Deposits, Stop Payments, and Overdrafts) Over the Past Year by Underbanked and All Consumers
Figure 17: Branch, ATM, Phone, Email Transactions Past 90 Days by Underbanked and All Consumers
Figure 18: Mobile Alerts Past 90 Days by Underbanked and All Mobile Consumers
Figure 19: Consumer Satisfaction With Primary Bank by Underbanked vs All Mobile Consumers
Figure 20: Mobile Activities by Underbanked vs All Mobile Consumers
Figure 21: Mobile Purchasing in Past 12 Months by Underbanked vs All Consumers
Figure 22: Age of Unbanked vs Underbanked vs All Mobile Consumers
Figure 23: Income of Unbanked vs Underbanked vs All Mobile Consumers
Figure 24: Gender of Unbanked vs Underbanked vs All Mobile Consumers
Figure 25: Ethnicity of Unbanked vs Underbanked vs All Mobile Consumers
Figure 26: Employment Status of Mobile Underbanked vs All Mobile Consumers
Figure 27: Financial Product Usage by Underbanked vs All Mobile Consumers
Figure 28: Consumer Data Plan by Underbanked vs All Mobile Consumers
Figure 29: Mobile RDC Desirability by Underbanked and All Mobile Consumers
Figure 30: Average Monthly Banking Fees by Type for 2002, 2006, and 2012
Figure 31: Phone Feature Usage by Underbanked vs All Mobile Consumers
Figure 32: Reasons Not to Use Mobile Banking for Underbanked vs All Mobile Consumers
Figure 33: Mobile Marketing and Mobile Advertising Use by Underbanked vs All Consumers
- Orlandi Valuta
- Globe Telecom
- Smart Communications
- State Bank of India
- Western Union
- Xpress Money