All to play for: Mobile financial services used by 20% of Americans - Fed

Around 20% of Americans used their mobile phone to access financial services in 2011, while another 20% are planning to follow suit in the future, according to a Federal Reserve survey.

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All to play for: Mobile financial services used by 20% of Americans - Fed

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The poll of 2300 people, carried out for the Fed by Knowledge Networks, suggests mobile banking is likely to gain significant traction in the US this year, with usage among one in three handset owners by 2013.

The young are most inclined to use their handsets for financial services, with people between 18 and 29 accounting for approximately 44% of all m-banking users, despite making up just 22% of all mobile phone users. Conversely, people age 60 and over account for only six per cent of all mobile banking users, but 24% of phone users.

The survey also shows a significantly higher level of mobile banking uptake among African Americans - 16% - and Hispanics -17%.

This could be linked to the potential of mobile technology to expand access to financial services for previously underserved populations. Nearly 30% of underbanked individuals used mobile banking last year.

The most common mobile banking activities are account balance checking and recent transaction monitoring, selected by 90%. Far fewer use their handsets to make online bill payments - 25% - locating in-network ATMs - 21% - or deposit cheques - 11%.

Among respondents that do not use m-banking, 48% cite security as a reason holding them back, while 58% simply say that their needs are met without the new technology.

Separately, a report from the World Economic Forum, developed in collaboration with the Boston Consulting Group, suggests that governments throughout the developing world can use mobile services, not only to advance financial inclusion, but also to deliver significant efficiencies and cost savings.

Within emerging economies, government disbursements account for roughly $1 trillion per year. However, an estimated 20% of those funds fail to reach the intended recipients owing to mismanagement, fraud, or corruption.

With its ability to act as a secure, authenticated, reliable, and personalised delivery platform, mobile finance can help minimise those leakages, thereby leading to significant efficiencies and cost savings for government, argues the report.

William Hoffman, head, telecommunications industry, World Economic Forum USA, says: "Mobile financial services represent a fundamentally transformational opportunity to connect billions of people to the formal economy. A renewed commitment by all stakeholders to not only discuss the potential of mobile financial services but to actually use them is needed to ensure that the promise of this opportunity is realized."

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