Introduction

In 2011, the Federal Reserve Board's Division of Consumer and Community Affairs conducted its first Survey of Consumers' Use of Mobile Financial Services (the "Mobile Survey"). Since that time, the adoption of mobile financial services has continued to increase, along with the range of services offered. As part of its ongoing efforts to monitor developments in the financial services arena and to gain insights into consumers' usage of, and attitudes toward, mobile financial services, the Board has continued to conduct the survey annually.¹ The fifth survey, conducted in November 2015, included a sample of respondents who had responded to both the 2013 and 2014 surveys, as well as a random sample of new respondents. The subsample of respondents who voluntarily completed both the 2014 and 2015 surveys allows for the analysis of changes in behavior over the past year among these individuals.

Survey Background

The original survey instrument and subsequent years of the survey were designed in consultation with a mobile financial services advisory group made up of key Federal Reserve System staff with relevant consumer research and payments backgrounds. The 2012, 2013, 2014, and 2015 survey samples were all composed of a mix of respondents to the previous year's survey and new survey respondents.

The 2015 survey was again administered by GfK, an online consumer research company, on behalf of the Board. The survey was conducted in English using a sample of adults ages 18 and over from KnowledgePanel ^®, a proprietary, probability-based web panel of more than 50,000 individuals from randomly sampled households; the sample was designed to be representative of the U.S. population. After pretesting, the data collection for the survey began on November 4, 2015, and concluded on November 23, 2015.

As shown in table 1, e-mails were sent to 1,364 individuals who had responded to both the 2013 and 2014 surveys and 2,324 randomly selected individuals from the remaining members of KnowledgePanel ^®. The respondents completed the survey in approximately 12 minutes (median time). Of the 2,510 qualified respondents used for analysis in this report, 1,064 had responded to the 2013 and 2014 surveys, while 1,446 were new survey respondents drawn from the general population.² Further details on the survey methodology are included in appendix A.

Table 1. Key survey response statistics: Main interview

Sample type	Number sampled for main survey	Qualified completes for analysis
2013-14 re-interviews	1,364	1,064
Fresh cases	2,324	1,446
Total primary sample	3,688	2,510

As with any survey method, Internet panels can be subject to biases resulting from undercoverage or nonresponse and, in this case, potential underrepresentation of adults who may be uncomfortable with technology. Not everyone in the United States has access to the Internet, and there are demographic (income, education, age) and geographic (urban and rural) differences between those who do have readily available access and those who do not. These concerns about survey error for Internet surveys are addressed by GfK providing Internet access to respondents who do not have it in order to include the portion of the population that does not have Internet access in KnowledgePanel ^®, and by using sample weights to ensure that the Internet usage and key demographics of the sample population match the U.S. adult population. See appendix A for a more detailed discussion.

While these steps have been taken to make the survey results generalizable to the U.S. adult population, some caveats apply to interpretation of the results, particularly for subpopulations. This survey was conducted in English, and thus may not reflect the attitudes and behaviors of those in the U.S. population whose dominant language is not English. In addition, survey estimates about technology use may be affected by the mode of the survey, as a respondent's use of or views about technology could be correlated with the choice to participate in an Internet survey. Thus, these results may be more representative of those who would be willing and able to respond in English to an Internet survey. In particular instances, comparisons to outside data sources are included where they may shed some light on these issues.

The full survey questionnaire is presented in appendix B. In the cases in which questions were only asked of certain respondents conditional on their answer to a prior question, such information is also reported on the questionnaire. Responses to the survey questions are presented in appendix C in the order that the questions were asked of respondents. Tables of summary statistics for the respondent demographic characteristics by mobile phone usage are also included as tables C.64 to C.67. Beginning at table C.68, cross-tabulations are presented of consumers' use of mobile phones, mobile banking, and mobile payments by age, race, gender, education, and income.

The remaining sections of this report summarize key findings from the Federal Reserve Board's survey of consumers conducted by GfK, with a focus on how consumers use mobile phones to conduct their banking and make payments, as well as on how consumers perceive and protect the security of mobile transactions and manage their finances. All data were weighted to yield estimates for the U.S. adult population. The numbers cited in this report are derived from the Mobile Survey unless otherwise noted.

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Consumer Access to Mobile Phones

As of November 2015, 87 percent of the U.S. population ages 18 and above owned or had regular access to a mobile phone. While the percent of the adult population with mobile phones has remained constant over the previous three years, an increasing proportion owns a smartphone: this survey's 77 percent smartphone ownership rate among those with mobile phones is a substantial increase over the 71 percent rate reported in 2014, 61 percent in 2013, 52 percent rate in 2012, and 44 percent rate in 2011.³

Rates of mobile phone usage remain high and consistent across demographic and socioeconomic groups. The prevalence of mobile phones demonstrates the extent to which they have become ingrained in modern culture. Mobile phone usage in the 2015 survey is higher among younger age groups: 91 percent for persons ages 18 to 44, 90 percent for persons 30 to 44, and 89 percent for persons 44 to 59. Mobile phone usage declines somewhat, to 81 percent for persons ages 60 and over. Smartphone adoption is similarly higher among younger generations, with the differences being more pronounced among age groups: 91 percent of those ages 18 to 29 and 88 percent of those ages 30 to 44 who own a mobile phone have a smartphone, while 72 percent of mobile phone owners ages 45 to 59 and 56 percent of mobile phone owners ages 60 and over have a smartphone.

Consistent with the results of prior years of this survey, results for the 2015 survey suggest that mobile phone ownership varies slightly by race and ethnicity, with non-Hispanic whites, Hispanics, and non-Hispanic blacks having ownership rates of 88 percent, 90 percent, and 83 percent, respectively. Adoption of smartphones in the Mobile Survey varies in a somewhat more pronounced way: 82 percent of Hispanic mobile phone users have a smartphone, compared to 74 percent of non-Hispanic whites and 76 percent of non-Hispanic blacks (table 2).⁴ Among those with a mobile phone, smartphone ownership is also higher (88 percent) for the "Other, non-Hispanic" group, which includes respondents who report their race as Asian, American Indian or Alaskan Native, Hawaiian, or Pacific Islander.

Table 2. Smartphone usage by race/ethnicity
Percent, except as noted

Race/ethnicity	Smartphone usage
	2011	2012	2013	2014	2015
White, non-Hispanic	41	50	57	68	74
Black, non-Hispanic	47	54	63	66	76
Other, non-Hispanic	45	54	76	83	88
Hispanic	55	60	72	82	82
2+ races, non-Hispanic	43	59	64	65	79
Total	44	52	61	71	77
Number of respondents	2,002	2,291	2,341	2,603	2,244

Note: Among respondents with a mobile phone.

Mobile phone and smartphone usage does vary with the level of household income. In households earning less than $25,000 per year, 76 percent of adults have a mobile phone of some type, and 58 percent of those with mobile phones have a smartphone. Use of both mobile phones and smartphones increases with income. Among those adults in households earning more than $100,000 per year, 96 percent have a mobile phone, and 86 percent of those with mobile phones have a smartphone.

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Trends in the Utilization of Mobile Banking and Payments

Services that allow consumers to obtain financial account information and conduct transactions with their financial institution ("mobile banking") and that allow consumers to make payments, transfer money, or pay for goods and services ("mobile payments") have become increasingly prevalent. Over the past several years these services have become available at a broader range of institutions, and the types of services offered continue to evolve.

With increased dissemination of technology and a broadening array of options, consumer adoption of mobile financial services has risen. In the 2011 survey, for instance, 22 percent of mobile phone users with bank accounts and 43 percent of smartphone users with bank accounts reported that they had used mobile banking in the previous 12 months.⁵ These proportions have increased in each year of the survey. In the 2015 survey, the prevalence of mobile banking continued to increase, reaching 43 percent of mobile phone users with bank accounts and 53 percent of smartphone users with bank accounts
(figure 1).

Use of mobile payments has also increased over time. In 2011, 12 percent of mobile phone users and 23 percent of smartphone users reported using mobile payments. By 2014, usage of mobile payments had increased to 22 percent for mobile phone users and to 28 percent for smartphone users. The steady increases in the adoption rate among all mobile phone users, but more gradual rise in the adoption rate among smartphone users, suggest that smartphone adoption substantially contributed to the increased use of mobile payments. The measure of mobile payments in the 2015 survey is not directly comparable to those from prior years due to a change in the definition of mobile payments in the most recent survey.⁶ Despite this change, the new estimates appear similar to those from prior years, with 24 percent of mobile phone users and 28 percent of smartphone users reporting that they used mobile payments in 2015.

A continuing impediment to adoption of either mobile banking or mobile payments appears to be consumers' limited demand for them: many consumers said their needs were already being met without mobile banking or mobile payments, that they were comfortable with non-mobile options, and that they did not see a clear benefit from using either service. In addition, around one in five (21 percent) of those with mobile phones and bank accounts indicated they do not know if their bank or credit union offers mobile banking, which may be consistent with a lack of interest in these services among a portion of the population.

That said, the share who do not know if mobile banking is available from their bank has decreased from 28 percent in 2013, and 22 percent in 2014. The share that said their bank does not offer the service has shown less of a change--6 percent in 2013, 4 percent in 2014, and 5 percent in 2015. The decline in the share of "don't know" responses may suggest an increase in consumer awareness of mobile banking services over the last few years. As such, this might be an indication that financial institutions are increasing their marketing of existing mobile services as well as that more of them may be offering these services.

Concerns about the security of mobile banking and mobile payment technologies are also frequently cited as reasons why consumers chose not to adopt these technologies. These concerns are described in more detail later in this report.

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References

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