Banks facing saturated mobile-banking market
Bank of America, JPMorgan Chase and Wells Fargo experienced slowed growth in active mobile banking users in the past quarter, according to their reported results. JPMorgan Chase added just 500,000 mobile banking users in the past quarter, compared with the 1.2 million users it added in the same period last year. Slowed adoption of mobile offerings could be attributed to banks having already onboarded customers who want to use the services. But adding in-branch services, such as appointments, could add value to mobile options.
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Three of the largest US banks — Bank of America, JPMorgan Chase, and Wells Fargo — held reported Q4 results on January 13.

The banks, which posted mixed results, saw slowing growth in active mobile banking users.

That could indicate market saturation and point to the need for banks to evolve their mobile strategy if they want to continue to capture and engage consumers.

This is how the banks stacked up:

Bank of America now counts 21.6 million active mobile banking users, marking a 16% year-over- year (YoY) growth rate.

JPMorgan Chase posted 26.5 million active mobile customers, up 14-16% on a year-over-year (YoY) basis. The bank added just 500,000 mobile banking users in the past quarter. For context, in the same period last year, the bank added 1.2 million mobile banking users.

Wells Fargo still managed to add 800,000 mobile customers in the quarter, even after last year’s scandal that led to a slowdown in new accounts. That pushed total mobile users to 19.6 million, up 21% growth YoY. The bank counts an additional 7.8 million online banking users.

Slowing gains in mobile banking users point to the idea that banks need to find better ways to capitalize on their mobile banking user base.

The market is likely approaching saturation. When mobile banking was a new feature, banks offered it as a way to onboard customers and attract tech-savvy users, which led to rapid adoption. Now, it’s all but required — millennials, for example, will leave financial institutions that don’t offer the service. That means that, moving forward, it’s likely that the majority of mobile banking adds are new accounts, since existing users that want the service are already using it.

Banks need to look to a service-based strategy in order to succeed. Since offering mobile banking is no longer enough, banks need to find ways to mobilize these massive user bases in order to increase engagement and loyalty, particularly because attrition is lower among mobile banking users, and they also tend to consume more banking products on average. One way to do that is to build hybrid offerings, which allow consumers to access important in-branch services, like ATMs or appointments, but building digital into that experience through cardless functionality or online booking. That could make interacting with the bank easier, which might push users to do it more regularly, making them more valuable.

Mobile payments are becoming more popular, but they still face some high barriers, such as consumers' continued loyalty to traditional payment methods and fragmented acceptance among merchants. But as loyalty programs are integrated and more consumers rely on their mobile wallets for other features like in-app payments, adoption and usage will surge over the next few years.

BI Intelligence, Business Insider's premium research service, has compiled a detailed report on mobile payments that forecasts the growth of in-store mobile payments in the U.S., analyzes the performance of major mobile wallets like Apple Pay, Android Pay, and Samsung Pay, and addresses the barriers holding mobile payments back as well as the benefits that will propel adoption.

Here are some key takeaways from the report:

In our latest US in-store mobile payments forecast, we find that volume will reach $75 billion this year. We expect volume to pick up significantly by 2020, reaching $503 billion. This reflects a compound annual growth rate (CAGR) of 80% between 2015 and 2020.

Consumer interest is the primary barrier to mobile payments adoption. Surveys indicate that the issue is less the mobile wallet itself and more that people remain loyal to traditional payment methods and show little enthusiasm for picking up new habits.

Integrated loyalty programs and other add-on features will be key to mobile wallets taking off. Consumers are showing interest in wallets with integrated loyalty programs. Other potential add-ons, like in-app, in-browser, and P2P payments, will also start fueling adoption. This strategy has been proved successful in China with platforms like WeChat and Alipay.

In full, the report:



Forecasts the growth of US in-store mobile payments volume and users through 2020.

Measures mobile wallet user engagement by forecasting mobile payments' share of their annual retail spending.

Reviews the performance of major mobile wallets like Apple Pay and Samsung Pay.

Addresses the key barriers that are preventing mobile in-store payments from taking off.

Identifies the growth drivers that will ultimately carve a path for mainstream adoption.

To get your copy of this invaluable guide, choose one of these options:

START A MEMBERSHIP Subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND over 100 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> Purchase the report and download it immediately from our research store. >> BUY THE REPORT

The choice is yours. But however you decide to acquire this report, you’ve given yourself a powerful advantage in your understanding of how mobile payments are rapidly evolving.