What Incentives Would Drive Use of Mobile-Only Banks?

October 18, 2016

nielsen-incentives-driving-mobile-only-bank-use-oct2016About 1 in 4 mobile device owners around the world say they’d be highly likely to use a mobile-only bank, according to a Nielsen study [download page]. For the 45% who are somewhat likely to do so, some incentives would be more convincing than others, per the report.

Among this group, 43% would be highly likely to convert to mobile-only bank users based on lower or no fees for purchase of investment products, with another 48% somewhat likely to convert based on this incentive. Similarly, discounts on lifestyle activities (such as booking entertainment tickets or purchasing movie tickets) would be highly likely to convince 42% of these mobile device owners, and somewhat likely to convert another 49% of them.

While a majority would be at least somewhat inclined to use a mobile-only bank as a result of each of the 6 incentives measured, some are less enticing. For example, only 32% would be highly likely to become customers of a mobile-only bank based on its lower lending rates, and even fewer (28%) would be highly likely to do so based on its straight-through process on loan applications.

Mobile-only banks might have more success in Asia-Pacific (APAC) than in any other regions, per the report. One in 3 respondents from APAC said they’d be highly likely to use a mobile-only bank, compared to 19% in North America and 17% in Europe. This continues a theme seen throughout the report in which affinity and engagement with mobile banking and payments is above-average in the Asia-Pacific region.

For example,

  • Respondents in China, India and South Korea are the most likely to use mobile devices to purchase a product or service and also the most likely to use a mobile app to make a purchase;
  • Mobile device owners in Asia-Pacific are more likely than those in other regions to have engaged in various mobile banking activities, including checking a bank account balance or recent transaction, paying a bill, and transferring money between bank accounts; and
  • Mobile owners in Asia-Pacific are the most likely to transfer money directly to another person using a mobile device in the next 6 months and the most likely to use mobile payments in bars, restaurants and retail stores.

This pattern could also reflect higher usage of mobile devices in the Asia-Pacific region. Recent research, for example, indicates that smartphones drive more website traffic in APAC than in the US and Europe.

Another pattern seen throughout the report: mobile banking and payments use is highest among Millennials (21-34). While that may not immediately seem surprising, it’s important to note that Millennials are more in tune with mobile money activities than are Gen Z respondents (15-20), suggesting that youth is not the only factor in play.

In fact, whereas Millennials are the most likely to have performed a variety of mobile banking activities (such as checking account balances and paying bills), Gen Z mobile owners are in some cases less likely to have done so than the oldest respondents (65+). Unlike other generations, for whom security issues are the top barrier to mobile banking, Gen Z is most apt to simply not have a need for mobile banking.

For the most part, though, the survey finds interest in mobile banking and payments activities to be highest among Millennials, followed by Gen Xers and then Gen Zers. For those interested in the use of mobile banking by Millennials, this topic is explored in MarketingCharts’ comprehensive report, Marketing Financial Services to Millennials.

About the Data: The Nielsen Mobile Shopping, Banking and Payment Survey polled more than 30,000 online respondents aged 15 and older in 63 countries.

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