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Javelin finds mobile banking down. Why?

2010 September 1

A recent Javelin Strategy and Research study of over 5,000 respondents in the US found mobile banking usage down. The study has caused a lot of head scratching in the industry — myself included.  The report compares this year’s survey to similar surveys in 2009, 2008, and 2007.

Javelin survey results

Consumers switching for mobile banking reasons doubled and is as important as ATM locations in switching banks

The study also uncovers a number of other intriguing facts that have been less widely reported and which I think are more important to bankers and the mobile commerce industry as a whole. In particular the study finds security increasingly important to adoption and that consumers are switching banks for mobile banking.

Security was cited by 52% of non-mobile bankers as a reason for not using mobile banking. This is up significantly after holding steady around 42%-43% in previous years.

Let’s address the controversial topic first. Javelin found mobile banking usage down (not adoption, as has been reported, but usage in the last 30 days). Javelin has found mobile banking usage rapidly growing from 7% in 2007 to 15% in 2009. In 2010 they found usage down slightly to 14%.

So, what’s going on? Is the mobile banking fad over?

I immediately called Javelin to discuss. I’m seeing mobile banking adoption increasing at banks across the U.S. and Canada. Most banks are tracking their success on how many users enroll for mobile banking services. The Javelin study asks users when they last used mobile banking. The tallied result is the number of respondents that have used mobile banking within the last month. So, users are signing up, but they’re logging in less.

So one explanation may be that users are simply looking at their accounts less. I have seen speculation in that past that the recession would cause people to watch their money more closely. Perhaps the opposite is occurring. Lean bank accounts are painful to look at, so people are avoiding looking unless they must.

Another explanation is that this is a pause in the usage curve, in a technical pattern similar to stock increases. Stock prices tend to rise, then pull back up to 30% then rise again. A drop of over 30% or so would indicate a more bearish shift. A one percentage point decline in usage is only a slight decline, although it surely is a surprising lack of growth. There’s naturally a spike in usage when a service is new, then a pullback as the novelty wears off.

The full impact of the recession may also explain the pullback. Javelin found an overall reduction in mobile phone usage (74% down from 85% in previous years). The financial crisis caused many mobile plans to be put on hold in 2009 which in turn is affecting adoption of the products that would have been rolled out in 2010. Very few mobile banking projects were under active development in late 2009, and activity picked up significantly in early 2010. Those efforts are coming onto the market right now.

It also could be that users tried mobile banking then stopped using it.

Some users undoubtedly tried mobile banking and quit. But, I don’t think mobile banking is a fad whose time has passed. Javelin also found that mobile banking is as much of a factor in consumers switch banks as the convenience of ATM locations (7%). If consumers didn’t like mobile banking, they wouldn’t be switching banks for it.

I think users are abandoning mobile banking at banks with bad mobile banking offerings and they’re going to banks with good mobile banking offerings as soon as they get the chance.

I think users are abandoning mobile banking at banks with bad mobile banking offerings and they’re going to banks with good mobile banking offerings as soon as they get the chance.

That’s a big deal. Banks spend many millions to expand and maintain their ATM network. In comparison, mobile banking can move the needle in every market with far less expense.

Banks with no mobile banking implementation at all should pay attention. Mobile banking is clearly table stakes because consumers will endure the pain of switching banks to get a good mobile banking offering. So it’s not enough to “check the box” and provide a bare bones mobile offering. Customers are leaving banks without mobile banking and they’re leaving banks with poor mobile banking.

Retailers and the broader mobile commerce market should heed this example as well. Shoppers will buy from someone else if their mobile presence is better.

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8 Responses leave one →
  1. September 1, 2010


    I’m interested in knowing what flavor of mobile banking was being offered to the customer that lowered their usage, or switched because of it.

    My guess is the banks that only offer a mobile web service are seeing their adoption slow or even decrease.

  2. September 2, 2010

    Hi George

    I don’t think Javelin asked “What type of mobile banking do you use?” so there’s not that level of detail.

    I suspect your hunch is right. I think the decrease is coming from implementations that are slow, hard to use and undifferentiated from the pack.

    There are more mobile web Implementations out there than anything else, so it makes sense they were affected disproportionately. They also tend to be the cookie cutter implementations and can be very slow.

    I think native app only implementations are also culprits. They take some time to launch and log in just to see a balance, which is consistently 80%+ of the usage.

    The lesson, if we’re right, is that banks need a mix of offerings (SMS, WAP, App) and they need to continuously improve the user experience or customers will go elsewhere.

  3. Eddy permalink
    September 3, 2010

    The clue is in the chart . Reasons for switching banks.

    This is saying that less people switched banks because they wanted mobile banking.

    This is NOT saying that people don’t want mobile banking or are using it less.

    In fact, a smarter interpretation is that is matters less because most banks offer mobile banking


  4. September 15, 2010

    David I agree the question seems to vague. You suggest WAP and mention performance. I agree on performance but disagree on WAP. We are finding that mobile is personal, customers don’t like “Cookie Cutter” Apps is a big part of it. I think of the Fable where you try to please everyone and actually please no one.

    Web Apps are the future of mobile banking as service providers in all industries realize customers want to define their mobile experience the same way they define their desktop dashboard. Even more so on Mobile the customer wants to understand what is urgent, understand their choices and Take Action.

    The mobile is a communication device. I challenge customers to think about that as they design mobile solutions. What do they need to communicate? What does the customer want to communicate back? 5o9inc delivers real-time device and user data that enables this type of Context based personalized design and performance management to your web apps.

  5. September 19, 2010

    The chart is saying people are switching banks because of mobile banking. This year 7% of respondents cited mobile banking. Last year 3% cited mobile banking (according to a follow-up query to Javelin). So mobile banking more than doubled as a reason for switching banks in one year.

    So the central question the research results raise is why are users using mobile banking less despite switching for mobile far more — and at a time when mobile banking enrollment is rising dramatically.

    My take is that users have stopped using bad mobile banking implementations and are switching banks to good mobile banking implementations.

    Each user is defining what is good and bad by voting with their feet.

  6. Nick H permalink
    September 25, 2010

    My guess is this is all a tempest in a teapot which might end in a visit from the Department of Statistic Protective Services.

    What’s the sample-size of the Javelin poll? Unless the sample is huge, a decrease from 15% to 14% is probably insignificant. No sample is perfect either, and the 30day window makes me very suspicious of timing issues.

    The headline should be “Javelin doesn’t find evidence of mobile banking usage growth”, not “Javelin finds mobile banking down”. Those are very different things.

    For example, the 7% of people who found mobile banking to be a factor in switching FIs is based on a sample size or 297. It paints a valid and worthwhile picture of consumer motivations, but probably isn’t strong enough to determine trending.

  7. David permalink
    September 30, 2010

    David, just found this article and really appreciate your insights. I can think of many bad (cookie-cutter) apps and mobile websites. However, I’m interested to understand who you think is providing the “best of breed” mobile solution – mobile web, mobile app, and comprehensive solution – one that is worthy of switching banks.

  8. October 1, 2010


    The overall sample size this year was over 5,000 respondents. Previous years were around 3,000 respondents. You’re right. 7% of 5,000 is a small number.

    To your point, no study should be taken on its own as gospel. I find this data interesting because it fits what I’m overwhelmingly seeing: anecdotally people are switching to banks with innovative offerings. Cookie-cutter banks all say they’ve “beat their wildest expectations” but I’ve seen banks where the enrollment number was less than 1,000 total. Set your wildest expectations low enough and you’ll guarantee success!

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