A) 30,000,000 US Consumers Do Mobile Banking
B) A fraction of the 30 million potential mobile banking customers have signed up for the service
C) 10% of all online banking U.S. households used mobile banking by the end of 2008 (about 46 million households currently bank online).
D) 3.1 million
E) All of the above.
It turns out that this is not an easy question to answer. As I mentioned previously on TheMoneyMashup, Bank of America claims that about 1.9 million of their customers use mobile banking. However, Celent asserts that there were only 400,000 mobile bankers in the US at the end of 2007. As for the total number of US mobile bankers in 2008, there is a very wide range of estimates.
In its banking safety scorecard compiled in November, Javelin found that just a fraction of the 30 million potential mobile banking customers have signed up for the service.
Yet this month a CNET article quoted Javelin and said that “an estimated 30 million consumers in the U.S. do mobile banking.”
The January 2009 Mobile Marketing Overview quotes Celent and asserts that “10% of all online banking U.S. households will use mobile banking by the end of 2008”. The company said that about 46 million households currently bank online. I am not a math major, in fact I even forgot how to do long division the other day, but I believe that means Celent is saying that there are 4.6 million mobile banking households.
The Wall Street Journal quotes ABI research and says that the number of mobile bankers in the US climbed to 3.1 million in 2008.
To sum it all up, we have three different research and four wildly different estimates (two different estimates by Javelin) that range from 3.1 million to 30 million. So, if you answered “E) all of the above,” you get a cookie.
Apparently determining how many US consumers use mobile banking is more of an art than a science. Some of the disparity might be explained away by how the different research reports are defining mobile banking. Perhaps some reports include any money related function – including applications not provided by traditional banks. Even so, I am not sure semantic differences can explain the whole gap. Bank of America only has 29 million online banking users. In order for Celent’s estimate to match Javelin’s, we would have to assume that each mobile banking household is made up of a little over 7 mobile banking customers. To confuse you even more, Tower Group estimates that 4.6 million consumers – not households – used mobile banking in 2008.
Does anyone have any insight into why these numbers are so far apart?
I agree. Mobile banking is such a poorly defined term. I dropped out of the mobile banking world for 3 years and came back to it to find the same forecasts with the only thing changed on them being the dates had all moved back 3 years.
If I use my cell phone to connect my PC to my internet banking terminal am I using a mobile banking service?
If i get SMS text alerts telling me I am overdrawn am I using mobile banking?
If I ring my bank from my cell phone am I using a mobile banking service?
More recently the use of smartphones such as the blackberry and the iphone muddy the waters because they are smart enough to use proper browsers (mostly a stripped down opera browsers) instead of the awful WAP standard. The only advantage of WAP was that because everything has to go (in clear) across a server in the mobile network at least they could count the numbers of users (:-)) – probably on one hand.
There are an army of companies trying to flog java based or modified propriatory browser based security solutions to mobile banking – the problem for them is that XHTML capable browsers with standard SSL make them redundant. The problem for WAP is that it is not a standard that is being developed any more – it is as the technical standard equivalent of the mud-skipper a fish that evolution left walking on fins on the edge of the pond but not good at swimming or walking.
Smartphones by their nature are only a relatively small segment of the market and with the average handset being changed in just over 2 years it is surprising that WAP has lasted so long – the truth is that it is too expensive to build a handset for the mass market with a decent browser in it. That in itself should tell you something about the demand up until now for mobile banking.
Of course the iPhone and Android change all that – but mobile banking will be “an another thing you can do …” not the main driver which as ever will be the sexy things you want to show off. Truth be told – mobile banking will happen – but it will be part of internet banking and part of what you have to do to get on in life not something anyone will think of measuring.
Barlcyas launched mobile banking services in 1995, but even in 2006 Lloyds bank were able to launch a service sending your balance by text and charging for the privilege as if they had just landed on the moon – so I don’t think innovation in this space provides a significant first mover advantage. The lloyds campaign execution was excellent and more than made up for the fact they had technically missed the boat. I say that as someone who worked on the Barclays project.
IF you want a source of information on mobile check out the new netsize guide it is about a gazilion meg there must be something in it that is worth reading. Also look at http://www.text.it for basic industry stats.