Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.
Comments are moderated and will not appear until the moderator has approved them.
Please submit appropriate comments. Inappropriate comments include content that is abusive, harassing, or threatening; obscene, vulgar, or profane; an attack of a personal nature; or overtly political.
In addition, no off-topic remarks or spam is permitted.
Consolidated Mobile Banking and Payments Survey Results Published
In earlier posts, we published highlights of the 2016 Mobile Banking and Payments Survey of Financial Institutions in the Sixth District results as well as a supplement showing the results by financial institution (FI) asset size. The survey was designed to determine the level and type of mobile financial services that FIs offered and to find out what plans FIs had to offer new services.
Six other Federal Reserve Banks also conducted the survey in their districts, and we've combined all the data into a single report. Marianne Crowe and Elisa Tavilla of the Boston Fed's Payment Strategies group led the team that consolidated the data. The report—now available on the Boston Fed's website—addresses mobile banking and payment services from the perspective of the FI. The report offers additional value with its inclusion of a large number of small banks and credit unions (under $500 million in assets), a group from which data are often difficult to obtain.
The seven districts participating were Atlanta, Boston, Cleveland, Dallas, Kansas City, Minneapolis, and Richmond. A total of 706 FIs responded.
Here are some of the key learnings from survey responses regarding mobile banking:
- Retail mobile banking offerings are approaching ubiquity across financial institutions in the United States. Eighty-nine percent of respondents currently offer mobile banking services to consumers, and 97 percent plan to offer these services by 2018.
- By the end of 2018, 77 percent of bank and 47 percent of credit union respondents will be providing mobile banking services to nonconsumers including commercial and small businesses, government agencies, educational entities, and nonprofits. Commercial and small businesses will be the most prevalent.
- Among FIs offering and tracking business mobile banking adoption, more than half still have adoption rates of less than 5 percent.
- The most important mobile banking security concern that respondents cited is the consumer's lack of protective behavior. In response, FIs have implemented a range of mitigating controls. To enhance security and help change consumer behavior, more than 80 percent of respondents support inactivity timeouts and multi-factor authentication (MFA) as well as mobile alerts.
And here are some important findings regarding mobile payments:
- Implementation of mobile payment services is growing as FIs respond to competitive pressure and industry momentum. In addition to the 24 percent already offering mobile payments, 40 percent plan to do so within two years. However, the current offering level fell substantially short of the expected 57 percent predicted by the responses to the 2014 survey.
- Mobile wallet implementations are increasing steadily, with Apple Pay as the current leader.
- Enrollment and usage remain low. Eighty-one percent of the respondents had fewer than 5 percent of their customers enrolled and actively using their mobile payment services.
- Asset size makes a difference in many areas: larger FIs have greater resources to expend on new services, implementations, and security technologies and controls.
- Banks and credit unions often differ in approaches and strategies for mobile payments.
We will conduct the survey again this year and are eager to see how the mobile banking and payments landscape has changed. If you have any questions about the survey results, please let us know.
By David Lott, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed