Mobile phones and mobile Internet access are in widespread use 87 percent of the U.S.

adult population has a mobile phone 52 percent of mobile phones are smartphones (Internetenabled) 87 percent of smartphone users have accessed the Internet on their phone in the past week The ubiquity of mobile phones is changing the way consumers access financial services 28 percent of all mobile phone owners have used mobile banking in the past 12 months, up from 21 percent in December 2011 48 percent of smartphone owners have used mobile banking in the past 12 months, up from 42 percent in December 2011 10 percent of those mobile phone users not cur- rently using mobile banking think that they will probably use it within the next 12 months The most common use of mobile banking is to check account balances or recent transactions (87 percent of mobile banking users) Transferring money between accounts is the second-most common use of mobile banking (53 percent of mobile banking users) 21 percent of mobile banking users have depos- ited a check using their mobile phonedouble the incidence in December 2011 Mobile phones are also changing the way consumers make payments 15 percent of all mobile phone owners have made a mobile payment in the past 12 months, up from 12 percent in December 2011 The share of smartphone users making a mobile payment in the past 12 months has effectively remained constant at 24 percent The most common use of mobile payments was to make an online bill payment (42 percent of mobile payment users, down from 47 percent in 2011) 6 percent of all smartphone users have made a point-of-sale payment using their phone in the past 12 months, up from 1 percent in Decem- ber 2011 22 percent of all mobile phone users expressed an interest in using their phones to buy things at the point of sale Perceptions of limited usefulness and concerns about security continue to be the main impediments to the adoption of mobile financial services For mobile banking, the primary reason mobile phone users had not adopted the services was that they felt their banking needs were being met.

Mobile phones are prevalent among unbanked and underbanked consumers The share of consumers who are unbanked was effectively unchanged, declining slightly to 10 percent in 2012 from 11 percent in 2011 The share of underbanked consumers has remained constant at 10 percent 59 percent of the unbanked have access to a mobile phone, half of which are smartphones 90 percent of the underbanked have access to a mobile phone, 56 percent of which are smartphones 49 percent of underbanked consumers report using mobile banking in the past 12 months

Services that allow consumers to obtain financial a ccount information and conduct transactions with their financial institution (mobile banking) and that allow consumers to make payments, transfer money, or pay for goods and services (mobile pay- ments) have become increasingly prevalent over the past year. In December 2011, for instance, 21 percent of mobile phone users and 42 percent of smartphone users reported that they had used mobile banking in the past 12 months. By November 2012, the prevalence of mobile banking had increased substantially to 28 percent of mobile phone users and 48 percent of smartphone users ( figure 1 ). H owever, use of mobile payments has increased far less rapidly. In December 2011, 11 percent of mobile phone users and 23 percent of smartphone users reported using mobile payments. By November 2012, usage of mobile payments had increased only slightly, to 15 percent of mobile phone users and 24 percent of smartphone users. Although the past year has seen some notable devel- opments in mobile payments services (e.g., the launch of a mobile payment app by a major retailer, growth in the number of mobile wallets, partnerships between mobile payment services and major payment networks), using a mobile phone to pay for a purchase.

consumers are using mobile phones to conduct their b anking, make payments, enhance information gathering while shopping, and manage their finances. The numbers cited in this report are derived from the Board survey unless otherwise noted. All data were weighted to yield estimates for the U.S. adult population. Only questions pertaining to these topics are discussed in the report; however, the complete survey questionnaire and the results of the entire survey are summarized in

One of the main reservations consumers have with a dopting mobile banking and mobile payment tech- nologies is concern about the security of the technol- ogy. Consumers perceptions of the security of vari- ous mobile banking methods for protecting personal financial information have changed over the past year. But even as adoption of mobile banking has increased, consumers are now more likely to believe the technology to be very unsafe or report that they dont know whether it is safe.
A recent study by the Pew Research Center indicates that more consumers are taking advantage of the simplicity, ease, and convenience of online and mobile banking. The report found that 51 percent of American adults and 61 percent of Internet users use online banking. It also discovered that 32 percent of adults have turned to their mobile devices for their banking needs. The number of Internet banking users saw a jump of 5 percent since the same survey was conducted by Pew in 2010. But the more remarkable increase occurred in mobile banking over the same time period. In 2011, only 18 percent of adults used mobile banking. The Pew study broke down the demographics of its respondents. Of those ages 18 to 29, 67 percent used online banking, and some 47 percent of the 65 and older group did. Those who had a high school education or less, and those who made less than $30,000 a year were about 20 percentage points less likely to use online banking than more educated, higherearning respondents.

This is interesting, given the fact that some segments of the underbanked population over-index on mobile device usage. Similar demographic results were found among those who used mobile banking, with one exception. Unlike Internet banking, which whites were the most likely to use, nonwhites were more likely to use mobile banking than whites. Also, the difference between young and older users increased dramatically, with 54 percent of those 18 to 29 saying they used mobile banking, while just 14 percent of respondents age 65 and older said they banked on their mobile device. The Pew study's results are closely aligned with the results of a study conducted last year by the American Bankers Association. That study also found that mobile banking was on the rise. Specifically, the ABA survey found that in 2012, 39 percent of U.S. adults preferred to bank online, up from 36 percent in 2010, and 6 percent preferred to bank on a mobile device, up from 3 percent in 2010. These statistics should serve as a reminder to FIs that digital banking is here to stay; in fact, consumers are embracing it. Offering modern and competitive mobile services will be a key component for the growth plans of most every community FI in the country.