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2014
Mobile Banking and Payments Survey
of Financial Institutions in the Sixth
District

Federal Reserve Bank of Atlanta
Retail Payments Risk Forum
David W. Lott

March 2015
The views expressed in this paper are solely those of the author and not necessarily those of the Federal Reserve Bank
of Atlanta or the Federal Reserve System.

Table of Contents

Survey overview ............................................................................................................................................ 3
Methodology............................................................................................................................................. 3
Financial Iinstitution demographic information ....................................................................................... 4
Mobile banking survey results ...................................................................................................................... 7
FIs not supporting mobile banking ........................................................................................................... 7
Customer segments served ....................................................................................................................... 7
Mobile banking offering longevity ............................................................................................................ 8
Mobile banking technology elements ...................................................................................................... 8
Services offered and planned ................................................................................................................. 10
Account alerts ......................................................................................................................................... 12
Mobile security ....................................................................................................................................... 13
Business case elements........................................................................................................................... 14
Barriers to mobile banking...................................................................................................................... 18
Commercial customer usage .................................................................................................................. 18
Mobile banking fees ................................................................................................................................ 19
Mobile payments survey results ................................................................................................................. 20
Mobile payments service offering .......................................................................................................... 20
Mobile payments business case ............................................................................................................. 22
Barriers to mobile payments .................................................................................................................. 23
Survey Learnings ......................................................................................................................................... 24
Appendix A
Mobile Banking Survey Form .................................................................................................................. 24
Appendix B
Financial Institutions in Sixth District States…………………..…………….………………………………………………….. 34

2

Survey overview
The Federal Reserve Bank of Atlanta conducted a mobile banking and payments survey of
financial institutions (FIs) in the Sixth Federal Reserve District1) between July and August 2014.
Concurrently, the Federal Reserve Banks of Boston, Richmond, and Dallas conducted an identical
survey of the FIs in their districts. The purpose of the Atlanta Fed survey was to determine the
level and type of mobile financial services offered by the FIs in the Sixth District, and to compare
those offerings to the consolidated survey results after they are published. The Atlanta Fed also
hoped to gain insights into the strategies and measures that FIs are pursuing to provide mobile
financial services to their customers.

Methodology
As a complement to the Consumer and Mobile Financial Services survey conducted by the Federal
Reserve Board’s Division of Consumer and Community Affairs—begun in December 2011 and
conducted annually since—several of the Federal Reserve Banks collaborated on developing a
mobile banking and mobile payments survey targeting FIs. The Federal Reserve Bank of Boston’s
Payment Strategies group created the base survey questionnaire and first distributed it in 2008 and
again in 2012. The base survey was updated by the various Federal Reserve banks participating in
the 2014 survey. The survey questionnaire is in Appendix A. For the purpose of the survey, mobile
banking is defined as “the use of a mobile phone to connect to a financial institution to access
bank/credit account information, e.g., view balances, transfer funds between accounts, pay bills,
receive account alerts, locate ATMs, deposit checks, etc.”
The Atlanta Fed conducted the survey from July 17 through August 15, 2014. The almost 1,400
FIs operating in the Sixth District received an e-mail that included an electronic version of the
survey with an online survey link. The invitation successfully reached an estimated 98 percent of
the FIs operating in the Sixth District. The regional payment associations Alabama Automated
Clearing House Association (ALACHA), Georgia Automated Clearing House Association
(GACHA), Southern Financial Exchange, and Tennessee Automated Clearing House Association
(TACHA) also sent the survey invitations to their membership2 to participate in the survey.
Respondents were also allowed to print and return a completed survey via e-mail or regular mail.
All but three of the FIs completed their surveys online. The three surveys returned via mail or email were manually entered using the online survey tool. A total of 201 completed surveys were
received for the Sixth District. An internal review process was used to detect if an FI returned
multiple surveys, and a total of six sets of duplicate responses were received. The duplicate
responses from each FI were compared and any major discrepancies were resolved with the FI’s
designated contact before the responses for the FI were consolidated into a single response. An
additional six responses were eliminated as they were either not from a financial institution
1

The Sixth District covers Georgia, Alabama, Florida, southern Mississippi and Louisiana, and the eastern two-thirds
of Tennessee.
2
ALACHA, GACHA, and TACHA merged January 1, 2015, and now operate under the name of PaymentsFirst Inc.

3

supporting consumer or business customers, or the FI did not operate in the Sixth District. After
culling the data, there were a total of 189 validated surveys for a response rate of approximately
14 percent. Table 1 shows the distribution by state of the 189 responding FIs.
Table 1. Survey Respondents by State and Asset Size

Banks

Credit Unions

With Assets
< $1 Billion

With Assets
< $1 Billion

State

# of
Responses

#

%

# of
Responses

#

%

AL

23

19

83%

4

3

75%

FL

30

29

97%

10

9

90%

GA

27

21

78%

9

7

78%

LA

15

14

93%

7

7

100%

MS

11

10

91%

4

4

100%

TN

35

27

77%

14

11

85%

Total

141

120

85%

48

41

85%

Financial institution demographic information
Based on Federal Deposit Insurance Corporation (FDIC) and National Credit Union
Administration (NCUA) reports, as of June 30, 2014, a total of 1,797 FIs (commercial banks,
savings banks, mutuals, credit unions (CUs), and co-ops) were operating in the six states of the
Sixth District. However, since the district includes only portions of Louisiana, Mississippi, and
Tennessee, the actual number of FIs in the District is estimated to be approximately 1,400. Of the
total FIs in the states covered by the Sixth District, 94 percent of the institutions have total assets
of less than $1 billion, with little difference between banks and CUs—at 92 percent and 96 percent,
respectively. Table B-1 in Appendix B provides a state-by-state breakout.
Of the 189 validated surveys, 75 percent were from banks and 25 percent from CUs. The
distribution of validated surveys at the state level was moderately consistent with three of the states
having variances of less than 5 percentage points. The exceptions were in Alabama, where the
level of CU responses was 6 percentage points below the state’s overall distribution; Louisiana,

4

where the CU response rate was 9 percentage points below; and Tennessee, where the CU response
rate was 10 percentage points higher than the overall distribution in the state.
Overall, both banks and CUs with under $1 billion in assets were slightly underrepresented
compared to the overall state profile (see table 2). For both the banks and the CUs, this difference
was the greatest in Alabama, Georgia, and Tennessee. Florida had an overrepresentation of 10
percentage points of the banks with assets under $1 billion.
Table 2. Differences in State Profiles and Survey Respondents by Asset Size

Banks

CUs

State

State
Total %
< $1B
Assets

Respondent
% < $1B
Assets

Difference
of %

State
Total % <
$1B Assets

Respondent
% < $1B
Assets

Difference
of %

AL

95%

83%

-12%

96%

75%

-21%

FL

87%

97%

10%

91%

91%

0%

GA

93%

82%

-10%

96%

78%

-19%

LA3

94%

94%

-1%

99%

100%

1%

MS4

92%

91%

-1%

99%

100%

1%

TN5

94%

76%

-18%

97%

79%

-18%

Total

92%

86%

-7%

96%

86%

-11%

Source: FDIC and NCUA data as of June 30, 2014

Overall, the majority (54 percent) of the respondents had total assets in the $100 million to $500
million range (Chart 1). The other three asset ranges were fairly evenly distributed. There was a
significant difference between the responding banks and CU groups in the smaller asset sized
segments. The banks that responded were primarily in the $100 million to $500 million range (61
percent). The smaller community banks (< $100 million) represent only 7 percent of the bank
respondents. For the CUs, the smaller CUs (< $100 million), at 41 percent, were the largest

3

The Sixth Federal Reserve District covers the southern half of Louisiana, with the remainder of the state in the
Eleventh Federal Reserve District (Dallas Fed).
4
The Sixth District covers the southern half of Mississippi, with the remainder of the state in the Eighth District (St.
Louis Fed).
5
Sixth District covers the eastern two-thirds of Tennessee, with the remainder of the state in the Eighth District (St.
Louis Fed).

5

segment, followed by the $100 million to $500 million segment representing a third (33 percent)
of the CU respondents.
Chart 1. Respondents by FI Type and Asset Size
100%
90%

14%

14%

14%

80%

16%

17%

12%

70%
60%

33%

$500 million to $1 billion

50%
40%

54%

$100 - $500 million

61%

< $100 million

30%
41%

20%
10%

> $1 billion

16%

0%

Overall

7%

Banks

Credit Unions

6

Mobile banking survey results
FIs not supporting mobile banking
Of the 189 qualified respondents, six (five commercial banks and one CU) indicated that they did
not currently offer, nor had any plans to offer, mobile banking services. These FIs were asked to
rank various elements that influenced their decision not to offer mobile banking services. One of
the six respondents didn’t answer the question, but the remaining five ranked the elements in order
of importance with the number 1 as being the most important. The most important reason FIs
indicated overall was their concern about security (weighted score of 1.0)—all five of the FIs that
provided a response that identified this as the most important reason for not offering mobile
banking. (See table 3.) Regulatory concerns were ranked the second most important by all five of
the FIs, followed by a lack of customer demand (weighted score of 3.7). The lack of consistent or
reliable cellular coverage in their service area scored the least important, with an average weighted
score of 6.0. The scoring between the banks and CUs was similar, with the exception of the lack
of a business case factor—the CUs’ score was 5.0 on this point, and the banks ranked it as more
important, at 4.0.
This left a total of 183 FIs currently offering or planning to offer mobile banking services (136
banks and 47 CUs), making up the body of the respondent data for the remainder of the survey.
Table 3. Items that Influenced the FIs’ Decision Not to Offer Mobile Banking Services

Overall
Score

Bank
Score

CU
Score

Security concerns

1.0

1.0

1.0

Regulatory issues

2.0

2.0

2.0

Lack of customer demand

3.7

4.0

3.0

Lack of standards and
interoperability

4.0

4.0

4.0

ROI / Lack of Business Case

4.2

4.0

5.0

Lack of consistent, reliable
cellular coverage

6.0

6.0

6.0

Issue

MOST IMPORTANT

LEAST IMPORTANT

Customer segments served
As expected, all of the survey respondents indicating support for mobile banking made (or planned
to make) the service available to their consumer customer base. Other major customer segments
were small business (85 percent), corporate/commercial customers (74 percent), and not-for-profit
organizations (75 percent). Slightly more than half the respondents (57 percent) provided services

7

to both governmental and educational entities. There was very little difference between the bank
and CU responses on this question.

Mobile banking offering longevity
Fifty-nine percent of the FIs have been offering their mobile banking service more than a year (see
chart 2). Almost a quarter (23 percent) began their mobile banking service within the last year.
This results in a total of 82 percent of the responding FIs having a mobile banking service in
operation. Fifteen percent of the banks and 14 percent of the CUs responding indicated they did
not currently support mobile banking but were planning to do so within the next two years. As
noted earlier, six of the FIs (3 percent) had no plans to offer mobile banking within the next two
years.
Chart 2. Length of Mobile Banking Service Offering
Q11. When did you start offering mobile banking to your customers? (Check
ONE.)
3%
Within the past year

15%

23%
More than one year ago

Currently not offering mobile
banking, but plan to offer within next
1-2 years
Do not plan to offer mobile banking

59%

Mobile banking technology elements
Overall, half (50 percent) of the FIs supported the “triple play” of text, web, and mobile banking
application. Interestingly, a much higher percentage of banks (57 percent) supported all three
platforms than did the CUs (39 percent). CUs were more likely to offer a downloadable mobile
banking app and to format their website for mobile access. (See chart 3.)

8

Chart 3. Mobile Banking Technology Platform Used
57%

60%

50%

50%

48%

39%

40%
32%

20%
10%

30%

29%

30%
15%

12%

8%

11%

8%

3%

3%

4%

0%
Overall

Banks

Credit Unions

"Triple Play" (text, web, app)
Downloadable mobile app
Website formatted for mobile access

SMS text messaging
Other/No Answer

An overwhelming majority of the FIs supported both the Apple iOS (98 percent) and Android (96
percent) operating systems. Support for the Microsoft Windows and Blackberry operating systems
was 23 percent and 18 percent, respectively, with minimal difference between the banks and CUs.
A couple of the FIs were not sure or had not made a final decision on their operating system
platform and selected “Other.”
Respondents were queried as to whether they currently offered or planned to offer mobile banking
services via a tablet-specific application. Ninety-five percent of the FIs indicated support for the
iPad, while only 69 percent showed support for Android tablets—a significant difference. CUs, at
83 percent, had a higher level of support for Android tablets than the banks, at 65 percent. The
Amazon Kindle tablet was supported by less than one quarter (21 percent) of the respondents.
The vendors providing mobile banking systems were quite varied (see chart 4), with major
differences between the banks and CUs. Fiserv, with an overall share of 23 percent, was the largest
single vendor for both the banks and CUs, followed closely by FIS (18 percent) and Jack Henry
(17 percent). However, the remaining 42 percent of the respondents used a total of 28 other
vendors. None of these other vendors accounted for more than 10 percent of the total, but the most
frequently named were First Data (14), Digital Insight (10), Q2 (7), MEA (7), and Access Softek
(5).

9

Chart 4. Mobile Banking System Vendors Used
Q15. What company provides or will provide your mobile banking system?

18%
FIS

42%

Fiserv
Jack Henry

23%

In-house system
Other (please specify):

0%

17%

Services offered and planned
Mobile banking functions currently offered by more than half of the FIs include account balances,
account statements and transaction history, transfer of funds between an owner’s accounts at the
FI, bill payment, and branch/ATM locator (see chart 5a). Major functions not currently offered but
planned included mobile remote deposits, mobile person-to-person transfers, and transfers
between the same owner’s accounts at different FIs. Overall, there was little variance in the current
and planned service offerings of the banks and the CUs, with the exception of the ability to view
credit card balances. Fifty percent of the CUs indicated they currently support this feature
compared to only 10 percent of the banks.
Of interest is that more than half the FIs (see Chart 5b) indicated they have no plans to support a
wide variety of services on their mobile banking platform, including the ability to make address
changes, reorder checks, make international remittances, check credit card or prepaid card
balances, access brokerage accounts, and manage personal finances. (Please note that the totals in
charts 5a and 5b don’t always sum to 100 percent as some of the respondents didn’t provide a
response for each service option.)

10

Chart 5a. Service Elements Provided or Planned
Q 16. Which of the following mobile banking services do you currently offer or plan to offer?
No plans to offer

Plan to offer

Currently offer

Bill presentment

Transfer funds
between same
owner's accounts
at different FIs

Access to
brokerage
services

International
remittances

Mobile person-toperson money
transfer

Mobile remote
deposit capture

ATM/branch
locator

Transfer funds
between same
owner's accounts
within same FI

Bill payment

View statements
and transaction
history (DDA,
Savings)

Check balances
(DDA, Savings)

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Chart 5b. Service Elements Provided or Planned (continued)
Q 16. Which of the following mobile banking services do you currently offer or plan to offer?
No plans to offer

Plan to offer

Currently offer

Personal financial
management

Check reorder

Account address
change

View prepaid
card/account
transaction history

Check prepaid
card/account
balances

View credit card
balances,
statements and
transaction history

Stop payment
request

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%

Question 17 of the survey also asked about FIs’ plans to offer a variety of additional features to
their mobile banking services (see chart 6). The two most popular new features offered by both
banks and CUs were providing single login/authentication credentials for online and mobile
services and the ability to enroll using a mobile device. The least popular feature was providing a
bilingual mobile website or application. The popularity of the designated features is expressed in

11

chart 6 as the percentage of FIs that offer or plan to offer them. As highlighted, the CUs seemed
to favor supporting additional services for the mobile device, such as account opening and
targeting the underbanked, more than the banks did.
Chart 6. Planned New Service Features
Q17. Do you (plan to) offer the following features? (Check ALL that apply)
80%
70%

60%
50%
40%
30%
20%
10%

Overall

0%

Mobile banking products
targeted to the underbanked

Single login/authentication
credentials for online and
mobile services

Open accounts over mobile
device

Enroll for mobile banking using
a mobile device (mobile
enrollment)

Bilingual mobile website or app

Banks
CUs

Account alerts
In response to Question 18, approximately three-quarters of the FIs indicated support for some
types of alerts. Table 4 provides a breakdown of the responses.
Table 4. Mobile Account Alerts

Alert Feature

Overall

Banks

CUs

Insufficient funds

66%

68%

60%

Credit card balance close to or over limit

13%

11%

19%

Funds transfer complete

55%

60%

40%

Bill pay

57%

60%

47%

Low balance
Card-not-present transactions
Two-way actionable text alerts
Other

76%
10%
11%
6%

79%
10%
10%
5%

68%
9%
15%
9%

12

The most supported alerts by both banks and CUs are low balance and insufficient funds alerts.
On the other end of the spectrum, less than 13 percent of the FIs were supporting credit card
balance limit alerts, card not present transactions, and two-way actionable text alerts. Overall,
banks were slightly more likely than CUs to support alerts for bill payments and account transfers.
Some of the FIs indicated support for other types of alerts including:







Personalized transaction alerts (type, value)
Account balance reaches designated level or range
ACH debits
Pending transactions
Deposits posted
Security alerts (e-mail address change, password change, failed sign-on attempts)

Mobile security
The survey respondents were asked to select their top three security-related issues or concerns
associated with mobile banking (see chart 7). Respondents had a wide distribution of the key
concerns, which included identity theft (54 percent of respondents), inadequate customer
protection behavior (53 percent), data breaches (52 percent), and insertion of malware/viruses
(48 percent). The issues of mobile spoofing (33 percent) and the use of unsecured networks (38
percent) were in the next tier of concerns. The lack of sufficient authentication did not appear to
be a major concern; only 18 percent of the question respondents identified it.

13

Chart 7. Top Security-Related Issues or Concerns
Q19. Please select your FI's TOP THREE security-related issues or
concerns associated with mobile banking.
60%
50%
40%
30%
20%
10%

Overall

Banks

Inadequate customer
protection behavior

Use of unsecured network

Mobile spoofing

Malware/viruses

Insufficient authentication

Identity theft

Data breach

0%

Credit Unions

Question 20 of the survey asked the FIs whether they currently use or plan to use a range of features
that can enhance mobile security. The leading features respondents identified were multifactor
authentication (82 percent), session time-outs (80 percent), encryption (55 percent), mobile
notifications (54 percent), and validating the mobile device ID (46 percent). Interestingly, by only
6 to 8 percent of the banks cited tokenization and biometrics, two of the most discussed security
enhancements today. None of the CUs expressed interest in biometrics, and only 7 percent of them
cited tokenization. Given the recent developments in mobile phone fingerprint sensors and
payment card number tokenization, it will be interesting to see how responses to this question
change in our next survey.

Business case elements
Respondents were asked to identify the primary business reason they offered or planned to offer
mobile banking (see table 5). There was a wide distribution of responses with little difference
between the bank and CU groups. Both groups cited customer retention and attracting new
customers as their primary reasons. Being regarded as a technology market leader was a less
important reason for offering mobile banking. The groups did not expect the mobile banking
service to generate revenue as evidenced by most of the FIs providing the service free of charge.

14

Table 5. Primary Business Reason for Offering Mobile Banking

Primary Business Reason

Overall

Banks

CUs

Retain existing customers

34%

34%

34%

Attract new customers

29%

27%

34%

Be market leader with technology

12%

12%

12%

Competitive pressure

23%

25%

20%

Increase revenue

1%

1%

0%

Question 22 asked respondents to identify all the business benefits that they have achieved since
offering mobile banking. The most common benefit cited was customer retention, with an overall
response of 71 percent, with 84 percent of the CUs and 67 percent of the banks indicating
achievement of that benefit. Improved efficiency was the next most-often-cited benefit, with 39
percent of the respondents choosing it, followed by reducing operational costs (23 percent) and
realizing increased transaction volume (21 percent). Roughly 6 percent of both groups indicated
they haven’t achieved any benefit from their mobile banking service. One FI indicated it offered
the service to attract the younger generation customer segment, and another saw it as an advertising
channel for the FI. The only factor where there was an appreciable difference between the two
groups was that 34 percent of the CUs indicated that they had realized increased transaction
volume, whereas only 16 percent of the banks indicated they achieved that element.
The survey next asked FIs how they planned to market the service (see chart 8, which displays the
responses of the two groups as well as their consolidated response). The primary marketing
methods used by both banks and CUs were promotions on each FI’s own website, followed by
signage in the branch and/or brochures. Direct mail and statement stuffers were the third most
frequently cited marketing method, with CUs using it slightly more than banks (60 percent to 50
percent). CUs indicated they were slightly more likely to use direct customer calling and social
media marketing than the respondent banks. Traditional media was cited by less than one third (31
percent) of the overall group, although CUs were less likely to use this method (18 percent) than
were banks (35 percent). CUs were slightly more likely to use banner ads on other mobile
applications or websites (29 percent) than were banks (23 percent). Other marketing methods cited
include billboards, account statement messaging, overprinting on cash envelopes, employee
buttons, and direct presentations to clients.

15

Chart 8. Marketing Methods Used for Mobile Banking Services
Q23. How do you (plan to) market your mobile banking
services? (Check ALL that apply)
100%
80%
60%
40%
20%

Overall

Banks

Banner ads on other
mobile apps or
websites

Social media
marketing (e.g.,
Facebook, Twitter)

Promote on your own
website

E-mail or phone calls
to existing customers

Branch signage and
brochures

Radio, TV, print ads

Direct mail/statement
stuffers

0%

Credit Unions

Question 24 had two parts: it first asked the FI what percentage of retail customers had enrolled
in the mobile banking service, and then what percentage had used the service within the last 90
days (see charts 9 and 10). Almost three-quarters (72 percent) of the FIs indicated they had
successfully enrolled less than 20 percent of their customers. Chart 9 shows that, for both groups
of FIs, the most frequently identified percentage of customers enrolled in their mobile banking
service was in the 5 to 20 percent range. The greater than 50 percent range was the least frequently
cited by both groups, although the percentage of CUs reporting that achievement was twice that of
the banks.

16

Chart 9. Retail Customers Enrolled by Percent of Segment
60%

23%

21%

5%

9%

Overall

Banks

>50%

5-20%

21-50%

4%

>50%

21-50%

5-20%

<5%

0%

24%

18%

<5%

22%

21%

50%

21-50%

10%

52%

51%

5-20%

20%

<5%

30%

>50%

40%

Percent of FIs

50%

Credit Unions

.

Chart 10 displays a similar distribution of FIs reporting customer usage of the mobile banking
service within the last 90 days. Almost one-third (32 percent) of the CUs, compared to only 15
percent of the banks, indicated that more than 20 percent of their customers had used their mobile
banking service.
Chart 10. Retail Customers Using Mobile Banking by percent Segment
60%

40%
57%

49%

20%

28%

Banks

9%

3%

5-20%

21-50%

5-20%

<5%

Overall

5-20%

4%

0%

23%

20%

<5%

12%

>50%

15%

21-50%

23%

<5%

10%

>50%

55%

21-50%

30%

>50%

Percent of FIs

50%

Credit Unions

Using an assumed range midpoint, calculating a weighted average suggests that CUs slightly
outpaced the banks in both enrollment and usage. However, the relative percentage of retail
customers engaged on an overall basis is low and represents major potential for growth. The usage
results (weighted overall average of 16 percent) also appear low when compared to the 39 percent

17

reported in the Federal Reserve Board’s 2015 Consumer and Mobile Financial Service survey6. It
will be interesting to compare these results to those of the other districts when their survey results
are released.

Barriers to mobile banking
Question 25 attempted to probe the main reasons that FIs believe customers are resistant to
adopting mobile banking services. For the 179 FIs that responded to this question, security
concerns and the lack of customer awareness of the service were the most often cited reasons and
were noted by more than two-thirds of the respondents. More than half of the respondents, with a
fairly equal response by the CUs and banks, indicated they believed their other customer channels
were meeting customer need. The least cited reason by both groups was that the mobile banking
application was not user friendly. Respondents were also given the opportunity to identify other
barriers. The most frequently mentioned theme revolved around older/elderly customers who were
not technology-savvy or had set habits and were not motivated to try the service. Another reason
mentioned by several of the respondents was the need to improve and increase the functionality of
the mobile banking application.
Table 6. Most Common Reasons Preventing Greater Customer Adoption

Ov e ra ll

B a nk s

CU s

App is not user friendly

15%

12%

22%

Login process complicated

21%

20%

24%

Security concerns

71%

71%

70%

Lack of customer awareness

69%

69%

67%

Phone screen size

27%

28%

26%

Other channels meeting customer's needs

54%

57%

46%

Other

15%

13%

22%

Reason

Commercial customer usage
Question 26 concerned the FIs’ intentions about the mobile banking services they offer to their
commercial customers. Only 45 percent of the CUs answered this question even though 72 percent
had earlier indicated they supported corporate and commercial entities. Over half (55 percent) of
the respondents indicated that their commercial customers were offered the same mobile banking
services as their retail customers. The ability to check account balances and monitor transaction
activity was the next most cited capability, with the banks (55 percent) outpacing the CUs (25
percent). As expected, because of their attention to corporate customers, a greater percentage of
6

http://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201503.pdf

18

banks (44 percent) indicated they offered or planned to offer cash management services than did
the CU respondents (30 percent). The ability to provide account administration and password
resets was more favored by the CUs (30 percent) compared to the banks (12 percent). Both the
banks (12 percent) and the CUs (15 percent) ranked mobile card acceptance support (for example,
Square) low. Several of the respondents mentioned remote deposit capture.
Question 27 probed enrollment and usage by commercial customers similar to the inquiry in
Question 24 for consumers. As in that previous question, only 45 percent of the CUs provided
responses, compared to 72 percent of the banks. As expected, enrollment and usage for commercial
customers were significantly lower than for consumers in both groups. Three-fourths (75 percent)
of the banking respondents indicated that enrollment and usage was less than 5 percent of their
commercial customer base, and only 3 percent indicated the penetration was greater than 20
percent. The CUs reported lower results, with none of the respondents reporting that they enrolled
more than 20 percent of their commercial customers and only 15 percent seeing more than 5
percent of their commercial customer base using mobile banking.

Mobile banking fees
Banks displayed a slightly higher willingness to charge for overall mobile banking services; 20
percent said yes, compared to 15 percent for the CUs.
Question 29 identified specific mobile banking services and inquired as to whether the FI charged
or planned to charge a fee for that service (chart 11). Overall, the FIs expect to charge fees for
mobile remote deposit capture and mobile person-to-person payments. CUs are more likely than
banks to charge for mobile remote deposit capture and slightly more likely to charge for mobile
P2P payments. Banks are more likely to charge fees for some of the other functions listed. One FI
indicated it would have a tiered fee structure for mobile remote deposit capture (RDC) based on
the customer’s desired funds availability, although there would not be a charge for standard
availability.

19

Chart 11. Charging Fees for Specific Mobile Banking Services
Q 29. Please indicate ALL services for which you (plan to) charge a fee.
80%

67%

64%

60%

39%

40%

33%

27%

20%
3%

Overall

Banks

Other

Commercial/small
business customers by
transaction type or
volume

Commercial/small
business customers
flat monthly fee for
services

Mobile funds transfer
between same
customer's accounts at
different FIs

Mobile P2P

Mobile RDC

0%

Credit Unions

Mobile payments survey results
The second section of the survey dealt with mobile payments, which the survey defined as:
Use of a mobile phone to pay for purchase at retail point of sale (POS) or food service
location, on the Internet for goods and services or digital content, or to pay for transit,
parking, or other transportation services, ticketing, etc. Payment may be initiated via SMS
text message, mobile Internet, downloadable app, contactless near field communication
(NFC) and/or quick response (QR) code.

Mobile payments service offering
The 183 respondents to Question 31 were asked to indicate whether they currently offer or planned
to offer mobile payment services to their customers. Overall, while only 14 percent have offered
these services for a year or longer, another 45 percent indicated they planned to make them
available in the next one to two years. In somewhat of a surprise, 42 percent of the respondents
indicated that they had no plans to offer mobile payments services within the next two years. There
was little difference in the response rates among the offering options between the banks and CUs,
with the exception of the banks more likely not to offer the service (44 percent) compared to the
CUs at 34 percent.
FIs were asked about the manner in which they were going to make the mobile payments service
available (see chart 12). Eighty-three percent of the respondents who were planning to offer the

20

service indicated they would do so by partnering with a third party. The banks (86 percent) heavily
dominated this selection, but it was also the number one selection of the CUs (76 percent). The
option of partnering with a card network was selected by 23 percent of the banks and 56 percent
of the CUs. The other options received minimal selections by the bank group. The CUs showed a
bit more diversity, perhaps because for many of them their path is not set, with 20 to 25 percent
indicating they might partner with a digital wallet, near field communication (NFC) wallet, or
retailers.
Chart 12. Mobile Payment Service Offering Configuration
Q32. How do you (plan to) offer mobile payment services?
100%
80%
60%
40%
20%

Overall

Banks

Other

Develop our own mobile
payment solution

Partner with retailers to
offer rewards/coupons

Partner with a third
party provider (e.g., FIS,
Fiserv, Monitise)

Partner with a digital
wallet/mobile solution
provider (e.g., PayPal,
LevelUp, Paydiant)

Partner with a NFCenabled wallet provider
(e.g., Google Wallet,
Isis)

Partner with a card
network (e.g., credit,
debit or prepaid)

0%

Credit Unions

The survey next probed the participants on a number of mobile payment services and asked the
participants to rank the services based on their perception of the value of the mobile payments
offering (see table 7). They were to rank them in order of importance on a scale from 1 to 5, with
1 being the most important. The service offering through a “partnership with a mobile provider
using a white label mobile wallet” had the greatest value (lowest weighted number value of 2.31)
for both banks (2.26) and CUs (2.47). For the credit unions, this scoring was more than likely
heavily influenced by the development of the CU wallet, which uses the Paydiant white-label
model and is being specifically tailored for CUs. For the banks, a link to a mobile provider offering
an NFC contactless solution was the second most important service. The tight range of scores
among all the mobile payment service options demonstrates one of the key issues facing the mobile
payments market, which is fragmented in terms both of players and of technologies.

21

Table 7. Ranking of Mobile Payment Services
Ov e ra ll

Ba nk s

CU s

Partner with mobile provider of white label mobile wallet (e.g., Paydiant)

2.31

2.26

2.47

Link to mobile provider offering NFC contactless solution (e.g.,Softcard)

2.68

2.67

2.69

Partner with merchants to allow customers to pay for purchases through a credit push

2.86

2.87

2.85

Link to provider for access using QR code (e.g., LevelUp)

3.09

3.08

3.11

Other

3.46

3.37

3.67

Ans we r Op tio ns

Mobile payments business case
The survey participants were then asked to select their primary business reason for offering or
planning to offer mobile payment services. The overall results (see Chart 13) reveal some slight
differences between banks and CUs. Attracting new customers was the primary reason for the
banks (32 percent), with competitive pressure ranked second (22 percent) and customer retention
a close third (21 percent). Thirty-five percent of the CUs equally scored both the attraction of new
customers and customer retention as the most important business reasons. Interestingly,
competitive pressure was scored low; only 9 percent of the CUs selected it as a primary business
reason. As with the mobile banking service, there is no expectation of any significant revenues
from mobile payments from either group.

22

Chart 13. Primary Reason for Offering Mobile Payment Services
Q34. If you (plan to) offer mobile payment services, what is your
primary business reason? (Check only ONE)
40%
35%
30%
25%
20%

Overall
Banks
CUs

15%
10%
5%
0%

Barriers to mobile payments
In the final question of the survey, the respondents were asked to identify all the barriers they saw
to offering mobile payments for purchases (see chart 14). The primary barrier that both groups
cited was that the market is highly fragmented and still maturing. Security concerns was the second
selection of both banks and CUs. Of interest was the number of respondents who indicated that
they didn’t believe they had enough information to make an informed decision. Since the smaller
FIs are highly dependent on their processor for system and application information, this would
appear to be a prime opportunity for those processors to assist their customers in developing a
mobile payments strategy.

23

Chart 14. Primary Reason for Offering Mobile Payment Services
Q35. Which barriers do you see to offering mobile payments for
purchases? (Check ALL that apply)
80%
70%
60%
50%
40%

30%
20%
10%

Overall

Banks

Other

Limited value of mobile
payments for purchases

Lack sufficient expertise to
make informed decision

Inadequate or not broadlyimplemented security tools

Market still immature and
fragmented

Security concerns (e.g., data
breach, fraud)

0%

Credit Unions

Survey learnings
Since this was the first mobile banking/payments survey conducted in the Sixth District, we have
no prior results with which to compare the findings and identify trends or changes in the mobile
banking environment. We intend to administer the survey every two years and will, once we have
enough data, be able to incorporate our analysis of trends and developments within the mobile
banking and mobile payments services.
Key learnings from the responses to this survey include:
 A small percentage (3 percent) of FIs do not currently believe that mobile banking
represents a strategic need within the next two years. The primary reasons cited for their
decision are security concerns, regulatory issues, and a lack of customer demand.

24























Mobile banking is a relatively new service. Almost a quarter of the respondents began
their service within the last 12 months and an additional 15 percent do not currently offer
the service but plan to do so within the next two years.
There are more than 30 mobile banking application vendors in the market with no single
vendor having more than a quarter of the market, although there is a large concentration
with three providers. Banks and CUs are generally served by different vendors, although
some of the major processors overlap the two groups.
There is very little difference in the basic functions that the banks and CUs offer.
Perhaps due to security concerns, the vast majority of FIs do not plan to support with
their mobile services such functions as stop payments, account address changes, credit
card account access, and international remittances.
Account alerts are an emerging feature that FIs are offering or planning. They notify
customers of low balances, insufficient funds, and bill payments that are due, and confirm
funds transfers.
As other mobile banking surveys have consistently reported, security concerns related to
identity theft, data breaches, malware, and poor customer security practices remain a
primary concern of FIs.
Despite biometrics and tokenization grabbing the current headlines, respondents
expressed little to no interest in these features for enhancing mobile security.
The primary reason FIs cited for offering mobile banking was as a defensive move, to
retain existing customers, although they also saw it as an opportunity to attract new
customers.
Consumer enrollment and usage levels remain anemic. Almost three-quarters (72
percent) of the responding FIs indicated they had enrolled less than 20 percent of their
customer base. With usage rates similarly low, there is a strong growth opportunity for
this channel.
Mobile banking functionality for commercial customers has been consolidated with
consumer functionality by more than half of the FIs, while others are working to offer
specific corporate functionality.
FIs acknowledge the barriers of their customers’ security concerns as well as a lack of
awareness and expect to use online and direct mail marketing to promote the service.
With the possible exception of remote mobile deposit capability, FIs do not expect to
charge customers for mobile banking or payment services.
The mobile payments environment is nascent and highly fragmented in both the number
of vendors and the wide range of technologies, which has created some stagnation. The
FIs are looking for the environment to sort itself out.

25

Appendix A

2014 Mobile Banking and Payments Survey
The Federal Reserve Bank of Atlanta and ALACHA, GACHA, SFE, TACHA
Please complete this online survey to help us better understand your organization’s mobile banking and
payments initiatives and service offerings. Your information is very important. It will enable us to give
you a detailed description of mobile banking and payments activities within our regional financial
institutions.
Survey Instructions:
This survey contains FIVE sections.
Sections 1 and 2 are REQUIRED for all respondents.
For sections 3, 4 and 5, please follow instructions within the sections.
If more than one person from the same financial institution receives this survey, please consolidate your
responses into a single survey.
If filling this survey out by hand, please send to the following address upon completion:
Mailing Address:
Dave Lott
Federal Reserve Bank of Atlanta
1000 Peachtree Street, N.E.
Atlanta, GA 30309-4470
Thank you for taking the time to complete this survey.

26

Section 1: Respondent Profile
1.
2.
3.
4.
5.
6.

Financial institution name*: __________________________________________________________
ABA number*:_____________________________________________________________________
Contact name:_____________________________________________________________________
Contact title:_______________________________________________________________________
Functional area of contact (e.g., business line, operations, etc.):______________________________
E-mail**:___________________________________________________________________________

*Required fields
** If you would like to receive an electronic copy of the survey results report, please provide an e-mail
address.
Section 2: Demographics
7. Corporate address:
Address line 1:_____________________________________________________________________
Address line 2: _____________________________________________________________________
City/town:_________________________________________________________________________
State: ____________________________________________________________________________
ZIP:_______________________________________________________________________________
8. What is your FI’s asset size?
□ < $100 million
□ $100-$500 million
□ $500 million to $1 billion
□ > $1 billion
9. Please indicate your financial institution type:
□ Commercial bank
□ Credit union
□ Savings bank
□ Cooperative or mutual bank
□ Other (please specify):
10. Please indicate to whom you provide services. (Check ALL that apply)
□ Consumers
□ Corporate/commercial entities
□ Small businesses
□ Other: (please specify)_________________________________________________________

27

Section 3: Mobile Banking
Please refer to the definition below for questions in the MOBILE BANKING Section:
Mobile banking uses a mobile phone to connect to a financial institution to access bank/credit account
information, e.g., view balances, transfer funds between accounts, pay bills, receive account alerts,
locate ATMs, deposit checks.

11. When did you start offering mobile banking to your customers? (Check ONE)
□ Within the past year
□ More than one year ago
□ Currently not offering mobile banking, but plan to offer within next 1-2 years
□ Do not plan to offer mobile banking [If respondent choses this option, goes directly to
Question 30]
12. What mobile banking technology platform do you use (plan to) use in the future? (Select ALL that
apply)
□ ‘Triple Play’ (text, web, app)
□ Downloadable mobile app
□ Website formatted for mobile access
□ SMS text messaging
□ Other (please specify): _____________________________________________________
13. Which mobile operating system does or will your mobile banking application support? (Check ALL
that apply)
□ Apple iOS
□ Google Android
□ Microsoft Windows Phone
□ Blackberry
□ Other: (please specify)__________________________________________________________
14. Do you (plan to) offer mobile services via a tablet-specific application? (Check ALL that apply)
□ iPad
□ Android
□ Kindle
□ Other (please specify):____________________________________________________________

28

15. What company provides your mobile banking system?
□ FIS
□ Fiserv
□ Jack Henry
□ Monitise
□ In-house system
□ Other: (please specify)_________________________________________________________
16. Which of the following mobile banking services do you currently offer or plan to offer?
Mobile Banking Feature
Currently offer
Plan to offer
No plan to
offer
Check balances (DDA, Savings)
□
□
□
View statements and transaction history
□
□
□
(DDA, Savings)
View credit card balances, statements and
□
□
□
transaction history
View prepaid account balances
□
□
□
Bill payment
□
□
□
Bill presentment
□
□
□
Transfer funds between same owner’s
□
□
□
accounts within same FI
Transfer funds between same owner’s
□
□
□
accounts at different FIs
Mobile person-to-person money transfer
□
□
□
Mobile remote deposit capture
□
□
□
ATM/branch locator
□
□
□
Personal Financial Management
□
□
□
Access to brokerage services
□
□
□
Prepaid debit card or account
□
□
□
International remittances
□
□
□
17. Do you (plan to) offer the following features? (Check ALL that apply)
□ Bilingual mobile website or app
□ Enroll for mobile banking using a mobile device (mobile enrollment)
□ Open accounts over mobile device
□ Single login/authentication credentials for online and mobile services
□ Mobile banking products targeted to the underbanked

29

18. What types of mobile alerts do you (plan to) offer? (Check ALL that apply)
□ Insufficient funds
□ Credit card balance close to or over limit
□ Funds transfer completed
□ Merchant bill pay
□ Low balance
□ Two-way actionable text alerts (e.g., FI sends customer insufficient funds text alert, customer
replies by text to schedule transfer).
□ Other: (please specify) ________________________________________________________
19. Please select your FI’s TOP THREE security-related issues or concerns associated with mobile
banking. (Check THREE only)
□ Data breach
□ Identity theft
□ Insufficient authentication
□ Malware/viruses (e.g., customer downloads an infected mobile banking app from app store)
□ Mobile spoofing*
□ Use of unsecured network (e.g., customer accesses open WiFi network)
□ Inadequate customer protection behavior (e.g. no mobile password, lost phone)
□ Other: (please specify)____________________________________________________________
*Mobile spoofing is misrepresentation or stealing of legitimate brand through:
 Fraudulent messages (e-mail, SMS or phone call) pretending to be from legitimate sender
 Counterfeit screen inserted on legitimate website that requests personal information to steal
user information
 Criminal use of a brand to make mobile app look like it came from a legitimate FI
20. Which of the following does your FI currently use or plan to use to enhance mobile security? (Check
ALL that apply)
□ Biometrics (fingerprint, facial or voice recognition, etc.)
□ Encryption
□ Geo-location
□ Mobile device ID
□ Mobile notifications (e.g., SMS text message, push notifications)
□ Multi-factor authentication
□ Time-out due to inactivity
□ Tokenization
□ Other: (please specify)

30

21. If you (plan to) offer mobile banking, what is your primary business reason? (Check only ONE)
□ Retain existing customers
□ Attract new customers
□ Be market leader with technology
□ Competitive pressure
□ Increase revenue
□ Other: (please specify)____________________________________________________________
22. What business benefits have you achieved since offering mobile banking? (Check ALL that apply)
□ Reduced operational costs
□ Improved efficiency
□ Customer retention
□ Increased transaction volume
□ Other: _________________________________________________________________________
23. How do you (plan to) market your mobile banking services? (Check ALL that apply)
□ Direct mail/statement stuffers
□ Radio, TV, print ads
□ Branch signage and brochures
□ E-mail or phone calls to existing customers
□ Promote on your own website
□ Social media marketing (e.g., Facebook, Twitter)
□ Banner ads on other mobile apps or websites
□ Other: (please specify): __________________________________________________________
24. What percentage of your retail customers has used your mobile banking services?
% of retail customers who ENROLLED in your
% of retail customers who USED mobile
mobile banking services
banking within the last 90 days
□ <5%
□ <5%
□ 5-20%
□ 5-20%
□ 21-50%
□ 21-50%
□ >50%
□ >50%
25. What are the THREE most common reasons you believe are preventing greater customer adoption
of mobile banking? (Check THREE only)
□ App is not user-friendly (slow, performance issues)
□ Login process complicated
□ Security concerns
□ Lack of customer awareness
□ Customers feel their banking needs are met through other channels
□ Other: (please specify)____________________________________________________________

31

26. What additional mobile banking services do you (plan to) offer your commercial customers? (Check
ALL that apply)
□ Business and commercial firms are offered the same mobile banking services as retail customers
□ Check corporate balances and monitor accounts
□ Cash management functions
□ Administer users and reset passwords
□ Mobile card acceptance plug-in reader/mobile POS (e.g., Square)
□ Other: (please specify)____________________________________________________________
27. What percentage of your commercial customers has used your mobile banking services?
% of commercial customers who ENROLLED in % of commercial customers who USED mobile
your mobile banking services
banking within the last 90 days
□ <5%
□ <5%
□ 5-20%
□ 5-20%
□ 21-50%
□ 21-50%
□ >50%
□ >50%
28. Do you (plan to) charge a fee for any mobile banking services?
□ Yes [If respondent chooses “Yes,” goes to question 29]
□ No
29. Please indicate ALL services for which you (plan to) charge a fee. (Check ALL that apply)
□ Mobile RDC
□ Mobile P2P
□ Mobile funds transfer between same customer’s accounts at different FIs
□ Commercial/small business customers flat monthly fee for services
□ Commercial/small business customers by transaction type or volume
□ Other: (please specify)____________________________________________________________
[Only for those who responded “No, Do not plan to offer mobile payment services” in question 11]
30. Please RANK the items that influenced your decision not to offer mobile banking services.
– Lack of customer demand
– Security concerns
– Regulatory issues
– Lack of standards and interoperability
– ROI/Lack of business case
– Lack of consistent, reliable cellular coverage
– Other: (please specify)____________________________________________________________

Section 4: Mobile Payments

32

Please refer to the following definition in the MOBILE PAYMENTS Section:
Mobile payment: Use of a mobile phone to pay for purchase at retail point of sale (POS) or food
service location, on the Internet for goods and services or digital content, or to pay for transit, parking
or other transportation services, ticketing, etc. Payment may be initiated via SMS text message,
mobile Internet, downloadable app, contactless near field communication (NFC) and/or quick
response (QR) code.

31. Do you (plan to) offer mobile payment services to your customers? (Check ONE)
□ Yes, offered within the past year
□ Yes, offered more than one year ago
□ No, currently not offering mobile payment services, but plan to offer within next 1-2 years
□ No, do not plan to offer mobile payment services [If respondent chooses this option, goes
directly to question 36]
32. How do you (plan to) offer mobile payment services? (Check ALL that apply)
□ Partner with a card network (e.g., credit, debit or prepaid)
□ Partner with transit authorities
□ Partner with a NFC-enabled wallet provider (e.g., Google Wallet, Isis)
□ Partner with a digital wallet/mobile solution provider (e.g., PayPal, LevelUp, Paydiant)
□ Partner with third party provider (e.g.,FIS, Fiserv, Monitise)
□ Partner with retailers to offer rewards/coupons
□ Develop our own mobile payment solution
□ Other: (please specify)____________________________________________________________
33. Please RANK the mobile payment services below based on your perception of the value of offering
them as part of your mobile banking app.
□ Partner with mobile provider of white label mobile wallet (e.g., Paydiant)
□ Link to mobile provider offering NFC contactless solution (e.g., Isis)
□ Link to provider for access using QR code (e.g., LevelUp)
□ Partner with merchants to allow customers to pay for purchases by transferring money directly
from their bank account to the retailer, under bank control (e.g., credit push)
□ Other: (please specify)___________________________________________________________

*A mobile wallet is a secure container in a mobile phone that stores multiple payment credentials
(debit, credit, prepaid cards and bank accounts) and value-added services, such as rewards and loyalty
cards that can be securely accessed to manage and initiate payments. Digital wallet stores payment
credentials on remote server (i.e., cloud)

33

34. If you (plan to) offer mobile payments, what is your primary business reason? (Check only ONE)
□ Attract new customers
□ Retain existing customers
□ Be market leader with technology
□ Competitive pressure
□ Increase revenue
□ Other: (please specify)____________________________________________________________
35. Which barriers do you see to offering mobile payments for purchases? (Check ALL that apply)
□ Security concerns (e.g., data breach, fraud )
□ Market still immature and fragmented
□ Inadequate or not broadly implemented security tools (e.g., biometrics, geo-location,
tokenization)
□ Lack sufficient expertise to make informed decision
□ Limited value of mobile payments for purchases
□ Other: (please specify)____________________________________________________________
[Only for those who responded “No, Do not plan to offer mobile payment services” in Question 31]
36. Please RANK the items that influenced your decision not to offer mobile payment services. Please
rank them from 1 to 8 in order of importance with 1 as the most important.

–
–
–
–
–
–
–
–

Lack of customer demand
Limited value or benefit
Security concerns
Regulatory issues
Lack of standards and interoperability
ROI/Lack of business case
Lack of consistent, reliable cellular coverage
Other: (please specify)____________________________________________________________

Section 5: Financial Institution Feedback
37. Do you want the Federal Reserve Bank of Atlanta and ALACHA, GACHA, SFE, TACHA to provide more
information about the following services? (Check ALL that apply)
□ Mobile contactless NFC payments
□ Mobile/digital wallets
□ Mobile P2P
□ Mobile security
□ Mobile banking services for the underserved
□ Regulatory updates
□ Other: (please specify)_________________________________________________________

34

38. Please share your ideas on what role(s) the Federal Reserve Bank of Atlanta and ALACHA, GACHA,
SFE, TACHA can play in helping to increase your knowledge of mobile banking and payments.
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
______________________

35

Appendix B

Table B-1. Total Number of Financial Institutions in Sixth District States
Banks

CUs

State

# of Banks

Assets < $1 Billion

# of CUs

Assets < $1 Billion

AL

135

128

95%

118

113

96%

FL

188

164

87%

157

143

91%

GA

217

201

93%

138

133

96%

LA7

140

132

94%

203

202

99%

MS8

84

77

92%

85

84

99%

TN9

176

166

94%

156

151

97%

Total

940

868

92%

857

826

96%

Source: FDIC and NCUA data as of June 30, 2014

7

Sixth District only covers the southern half of Louisiana with the remainder of the state in the Dallas Eleventh
District.
8
Sixth District only covers the southern half of Mississippi with the remainder of the state in the St. Louis Eighth
District.
9
Sixth District only covers the eastern two-thirds of Tennessee with the remainder of the state in the St. Louis Eighth
District.

36