Ardent smartphone users drive mobile banking and payment trends

When it comes to determining where the futures of things like mobile banking and digital wallet platforms lie, it might be time for the companies developing these systems to look at the habits of those who enthusiastically engage in using them first.

People who engage in smartphone use with great fervor, known to some as "smartphonatics," is the demographic that usually drives demand for mobile banking and payments, according to new research from ACI Worldwide and the Aite Group. In fact, 80 percent of these smartphone users have tapped their mobile devices to engage in mobile banking, compared with just one-third of non-smartphonatics who have done so. And along similar lines, 70 percent of smartphone devotees used their device to make mobile payments, compared with less than a quarter of non-users.

"Smartphonatics enthusiastically use their smartphones when they shop for products and services as well as when they interact with their banks," said Ron Shevlin, senior analyst for the Aite Group. "They exist around the world and while they may be more concentrated in some countries it is quite clear they are an emerging consumer force. Smartphonatics are driving the adoption of mobile banking and payments and will be an agent for change. Financial and retail institutions will need to adapt or risk being left behind."

In the 14 countries studied, about 25 percent of consumers qualified as smartphonatics, and about 20 percent of those in America did so, the report said. This group tends to be young – with 36 percent of them between the ages of 20 and 31, and another 33 percent or so between 32 and 46.

What does this mean for traditional banking and payments?

While many younger consumers are showing a tendency toward adopting new banking and payment methods afforded them by ever-improving technology, it's unlikely that the rising tide of smartphone use will have an appreciable effect on the way people have banked and made purchases for decades, the report said. Even among the most fervent smartphone users, it was not the only way they made purchases or handled their bank accounts, and again, it's important to keep in mind that they still make up a relatively small proportion of the consumer population.

In reality, it's more a case of these users being more willing to engage in new features rolled out by financial institutions or payment developers, the report said. Experimenting, however, may give them and their lender or bank a better understanding of what may make these systems work within the wider population, and what doesn't.

Mobile banking is generally viewed as being more convenient for consumers than even online account management because it gives them access to details about their funds anywhere, and generally has been known to foster improved relationships between financial institutions and customers. Many were, at first, slow to adopt these account management methods, but now use them regularly.

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