American Banker Mobile Banking Index Continues Steadily On

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July’s composite index value of 71.8 shows continued growth.

American Banker’s Mobile Banking Intensity Index (MBII), a monthly measure of mobile banking deployment and adoption in the U.S., revealed another period of expansion for July although at a continued slower rate of growth, with a reading of 71.8. This composite index value dropped slightly from June’s reading of 72.5, reflecting a marginal slowdown in the growth rate for the third consecutive month.

The index was developed by the Research unit of SourceMedia, a provider of B2B news, analysis and marketing services and owner of American Banker, in partnership with Verizon.

HOW THE INDEX WORKS

The Mobile Banking Intensity Index is a diffusion index made up of 11 tracked components that summarize mobile banking activities, such as downloading bank applications, checking balances and transactions, transferring money and depositing checks.

Respondents are asked whether each indicator increased, decreased or had no change from the previous month. Responses do not include opinions, intentions or expectations, although bankers are given the opportunity to comment about market conditions.

Composite readings above 50 indicate an expansion of activity while readings below 50 point to contraction. The farther from 50 a reading is, the stronger the indicated change.

RECENT INDEX HIGHLIGHTS

The MBII’s July reading of 71.8 shows, though slightly down from the previous month, that banks are still aggressively developing and deploying mobile banking tools and users are increasingly adopting them. Data is based on a survey of 289 banking professionals conducted in August, in which respondents were asked about the change in business conditions in July. (View article: http://www.americanbanker.com/issues/178_163/growth-in-mobile-banking-use-remained-steady-in-july-1061526-1.html)

The biggest change SourceMedia researchers observed with the MBII this month involved mobile check deposit. Though 64.2% of respondents reported increased volume of activity from customers using their smartphone to remotely deposit checks in July compared to June, the index value for the average transaction value of checks deposited via mobile device dropped from 86 to 75.4, a decline of more than 10 points, indicating slower growth for the month. Just over a third of respondents, 34.9%, said volume of activity for this feature stayed the same for both months.

Consumer downloads of mobile banking applications grew again in July, increasing the index value for that component 3 percentage points from 76.9 to 79.9 reported in June, reflecting a faster rate of growth.

Text alerts, still a relatively new feature for many banks, accelerated slowly, with 47.3% of respondents saying usage was higher in July than in June. Almost half of bankers, 49.1%, stated usage was the same between the two months.

An escalation in downtime for mobile applications (voluntary and involuntary) from June to July resulted in an index value rise from 53.6 in June to 57.5 in July. While 12.1% of respondents saw greater downtime in July than in June, 61.2% said it stayed the same. Only 26.9% reported decreased downtime between July and June.

THE VOICE OF THE BANKING PROFESSIONAL

Comments from the bankers surveyed indicate that most are still in the early days of their mobile banking efforts and are enjoying a steady pace of adoption. At the same time, some are suffering from typical growing pains such as downtime, as noted above.

Respondents cited “server replacements,” “power outage that resulted in hardware failure”, “hiccup in service from a provider” and “planned maintenance” as reasons for spikes in downtime.

Some bankers drew a direct correlation between enrollment for mobile banking applications and increased usage. “Mobile was just launched a few months ago so we are adding new customers each month, increasing overall activity,” one respondent said. Another noted: “Activity and transaction value are increasing because this is a relatively new product in its growth stage.”

As many bankers acknowledged that mobile banking is gaining traction and becoming “a larger portion of the business, one boldly predicted, “mobile is going to be our primary channel within two to three years.”

FUTURE INDEX READINGS

Monthly readings of American Banker's Mobile Banking Intensity Index will be presented as a time series that can be used to monitor the prevailing rate and direction of change in banking business cycles and eventually benchmark whether an institution is operating in line with overall industry needs.

About American Banker Research
American Banker Research is a unit of American Banker, the flagship information brand of the diversified B2B media company SourceMedia. American Banker Research brings a full range of professional research capabilities to companies and executives in banking and payments. The unit manages the American Banker Executive Forum, a community of senior banking and payments executives who are committed to regularly sharing opinions and insights with the editorial and research groups at American Banker. Members include qualified professionals who read American Banker and its sister brands Bank Technology News and PaymentsSource, and attend their professional conferences. These include C-level executives and other senior professionals employed at commercial and community banks, bank holding companies and other financial companies across all asset classes.

About SourceMedia
SourceMedia, an Investcorp company, is a business to business media and marketing solutions company serving the financial industry and the related fields of professional services and technology. SourceMedia offers its clients and subscribers professional information services, industry-standard research, data applications, in-depth seminars and conferences, and specialized marketing services.

About Verizon
Verizon Communications Inc., headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to consumer, business, government and wholesale customers. Verizon Wireless operates America’s most reliable wireless network, with more than 98 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and delivers integrated business solutions to customers in more than 150 countries, including all of the Fortune 500. A Dow 30 company with nearly $116 billion in 2012 revenues, Verizon employs a diverse workforce of 183,400. For more information, visit http://www.verizon.com.

Contact
For more information, please contact:

Dana Jackson
dana.jackson@sourcemedia.com
212.803.8329

Richard Melville richard.melville@sourcemedia.com
212.803.8679

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