Branch beats mobile for US consumers in BBVA banking report

Security concerns and preference for face to face banking are major barriers to customers adopting mobile banking, BBVA have found.

Security concerns and preference for face to face banking are major barriers to customers adopting mobile banking, BBVA have found.

A report by BBVA Compass found that more than half (54%) of US consumers who do not use mobile banking felt that their banking needs were already met.

When asked why they did not use mobile banking, 49% of respondents cited security while 14% noted that they did not trust technology altogether.

Branch banking remains the most popular form of banking in the US. The majority (85%) of respondents said they had visited their local branch within the past year. Mobile banking ranked as the least common form of interaction with 29% of respondents saying they had used mobile banking within the past 12 months.

Online banking is the second-most popular option with 74% of respondents saying they had used it in the last 12 months.

The Economic Outlook report examined the adoption of smartphone banking in the US along with other financial trends, including crowd funding and the outlook for the US economy.

Smartphone banking use is on the rise, as 29% of respondents said they had used mobile banking in the past 12 months – a rise from 22% in 2011.

BBVA economists predicted that mobile banking would accelerate as smartphones become increasingly widespread. It found 87% of adults and 90% of 18-44 year olds had regular access to a mobile phone.

The report’s chief economist, Nathaniel Karp, said banks need to catch up with the rise in technology adoption. "To succeed in this new hyperconnected and competitive environment, banks will have to follow a customer-centric approach and offer simple, user-friendly and effective products," he said.

Checking an account balance was the most popular form of mobile banking, as 85% of smartphone users polled said they had done so using a mobile phone in the last 12 months.

Depositing a check via a mobile phone was the least popular form of mobile banking, a facility used by 21% of mobile phone users polled in the past 12 months.

Text balance alerts were received by 29% in the previous year, and 24% had paid a bill online bill via a website or mobile device.

Crowdfunding was also identified by the economists as a force for change in retail banking. The economists warned the practice of funding a project from a pool of people, which increased 85% from 2011 to 2012 worldwide, could displace banks as a source of credit.

The report suggested banks develop their own crowdfunding platform as a rival to group funding sites such as Indiegogo and Kiva. "Banks will face a new competitor with lower operating costs, a different approach to risk management and a simpler product offering," the economists predicted.

The research by BBVA Compass and using US Federal Research Board data was conducted in 2012 and published in July 2013.

Read the full report here.

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