Fastest Growth in Mobile Banking Is for Transactions, Especially by Smartphone

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Mercator Advisory Group survey of U.S. consumers finds young adults prefer to perform banking transactions by smartphone

Excerpt of one of the 39 exhibits in this report

Consumers increasingly prefer using their smartphones to manage their accounts and make just-in-time transactions at their convenience, rather than going to the branch teller for simple transactions.

The most recent Insight Report from Mercator Advisory Group’s CustomerMonitor Survey Series reveals that 9 in 10 U.S. adults use some form of online banking, including more than half who use their mobile device to do so. The survey findings are based on responses from a sample of 3,000 U.S. adults with banking relationships collected in the company’s CustomerMonitor Survey Series annual online Banking and Channels survey, conducted in November 2015.

The report, titled Digital Banking: Smartphones Spark Online and Mobile Growth, reveals that consumers are performing more banking activities online and by mobile, and especially by smartphone. More consumers today check balances and account activities, receive alerts from their financial institutions to help manage their accounts more effectively, pay bills and transfer funds to another person, especially by smartphone. The greater accessibility of mobile devices for managing their accounts and making bank transactions is encouraging more consumers to take advantage of this, particularly the young adults.

The fastest growth in digital banking is for making bank transactions by smartphone, such as paying bills from an FI website, transferring funds to another person or depositing checks, performed by 41% of U.S. adults, up from 36% in 2014. While now primarily computer-based, consumer preference is shifting toward smartphones, as more consumers prefer to make bank transactions using their smartphones (18% in 2015, up from 17% in 2014 and 13% in 2013) and fewer prefer to transact on their desktop or laptop computers (73% in 2015, down from 74% in 2014 and 78% in 2013). Young adults are driving this shift to mobile, and are nearly twice as likely as average to prefer smartphones for bank transactions (by 30% of Millennials, aged 18–34, up from 26% in 2014) and less likely to prefer using computers to do so (60% prefer to use computers, down from 63% in 2014) with little change in tablet preference (which hovered around 10% over the past three years). Consumers who use mobile banking apps are even more likely to prefer to transact by smartphones (33%, up from 27% in 2014) and even less likely to prefer computers (56%, down from 59% in 2014), as consumers increasingly rely upon digital banking as their digital “branch” to replace the tellers for simple transactions.

The report Digital Banking: Smartphone Sparks Mobile and Online Growth highlights trends in use of online banking by computer and mobile platforms, communication methods with financial institutions, use of personal financial management (PFM) tools, alerts, online bill-payment methods and electronic billing, person-to-person (P2P) money transfers and demographics of recent account openers. The study evaluates the account opening process online, U.S. consumers’ preferences of platform for making bank transactions, their use of P2P money transfers, and their willingness to pay for expedited services.

“Consumers increasingly prefer using their smartphones to manage their accounts and make just-in-time transactions at their convenience, rather than going to the branch teller for simple transactions,” states Karen Augustine, author of the report and manager of Primary Data Services at Mercator Advisory Group, which includes the CustomerMonitor Survey Series.

Highlights of this Insight Report include:

  • Shifts in communication methods with financial institutions, and banking activities performed by computer and mobile platforms
  • Usage breakdown of electronic payments, e-billing and financial management tools, tax preparation and personal financial management (PFM) software, and changes in use of PFM tools
  • Use of person-to-person (P2P) money transfer to another person’s account domestically and internationally and willingness to pay for same-day transfer. Use and preference of primary FI or other type of provider for P2P transfers.
  • Use of mobile check deposit, amount the user is likely to deposit this way, and expected changes in use
  • Demographics of recent account openers, online vs. other methods, satisfaction with online account opening, funding and use of new accounts, and need for additional assistance

The report is 76 pages long and contains 39 exhibits.

Members of Mercator Advisory Group CustomerMonitor Survey Series Service have access to this report as well as the upcoming research for the year ahead, presentations, analyst access and other membership benefits.

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Mercator Advisory Group is the leading independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal

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Karen Yetter
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