Council Corner

Mobile Demographics Hold Promise

Technology makes it easier to reach unbanked and underbanked consumers.

October 24, 2012

As savvy marketers know, today’s hyperconnected consumers want brands to adapt to an evolving landscape of communication channels.

Many marketers, as a result, are transforming the ways they connect across email, social, and mobile media. But the evolution of technology provides even greater advantages to financial marketers.

Mobile banking and payments show promise to expand financial access to previously underserved demographics, according to a recent study from the Federal Reserve Board.

The study, “Consumers and Mobile Financial Services,” notes that 87% of consumers own mobile phones. It examines consumers’ use of and attitudes toward mobile phones and mobile financial services.

The results are based on the online responses of 2,290 adult participants.

Mobile phone use is high among minorities, younger generations, and those with low income levels—groups often unbanked or underbanked.

Among respondents, 89% of African-Americans and 86% of Hispanics own mobile phones and are far more likely to have smartphones than are Caucasians.

Mobile phone adoption is highest for younger age groups. About 95% of those between ages 18 and 24 own mobile phones, and half report having smartphones.

The Fed report offers these definitions:

  • Underbanked: Consumers who have checking, savings, or money market accounts, but also rely on alternative financial service providers, such as payday lenders, check-cashing outlets, or pawn shops.
  • Unbanked: Consumers who don’t have checking, savings, or money market accounts.

The Center for Financial Services Innovation reports that consumers younger than age 25 are increasingly underbanked—some as a matter of choice—and they appear comfortable with alternative financial services.

The Fed report estimates 11% of the U.S. adult population is unbanked, and another 11% is underbanked.

The underbanked make significant use of mobile financial services. Remarkably, 91% of underbanked consumers have mobile phones, and 57% have smartphones—rates far exceeding those for the overall population (87% and 44%, respectively).

These consumers also are more likely to use mobile payments than the general public and are substantially more likely to make bill payments using their mobile phones.

In fact, 29% have used mobile payments in the past 12 months, and 62% of those who used mobile payments did so to pay bills. This compares with 47% of the overall population of mobile phone users.

Among the unbanked, 64% have mobile phones and 18% own smartphones. And 10% of the completely unbanked used mobile banking in the past 12 months, and 12% made mobile payments.

Study participants, overall, who use mobile banking performed the following mobile transactions in the past 12 months:

  • Checked account balances or recent transactions, 90%;
  • Downloaded their financial institution’s mobile banking application (app), 48%;
  • Transferred money between accounts, 42%;
  • Received a text message from their financial institutions, 33%;
  • Paid bills using their financial institution’s website or app, 26%;
  • Located the nearest in-network ATM for their financial institution, 21%;
  • Deposited a check to their account using a phone’s camera, 11%; and/or
  • Managed investments, 2%.

The ubiquity of mobile access is quickly changing the ways consumers access financial services.

The accelerating pace of technology adoption, consumer behavior, and content availability are creating a “perfect storm” for marketers, information technology professionals, and end-users.

Soon, mobile banking and bill-pay won’t be value-added points of differentiation—they’ll be expected.

The shift from traditional communication channels to mobile media creates unprecedented opportunities to reach more consumers. Marketers who recognize this, and act, will be in the best position to compete.

MICHELLE HUNTER is senior vice president, marketing and development at Credit Union of Southern California, Whittier, and vice chair of the CUNA Marketing & Business Development Council. Contact her at 714-671-2746. For more information about CUNA Councils, visit