Americans' Overall Cell Phone Use Dropping

Overall mobile phone adoption dropped from 85% in 2009 to 74% in 2010, according to Javelin Research. But mobile-banking-friendly smart phone usage has grown 7%.

Surprising news from Javelin Research today — 23 million Americans have given up their cell phones to save money, according to a survey it conducted between April 2009 and March 2010 from three random-sample panels totaling more than 10,990 consumers. According to the researchers, consumers are canceling cell phone contracts to save money; overall mobile phone adoption dropped from 85% in 2009 to 74% in 2010.

However, smart phone adoption continues to grow; seven percent more U.S. consumers have smart phones today than a year ago. These smart phone users are also avid mobile banking users.

“Android and iPhone owners by far are the biggest users of mobile banking," said James Van Dyke, Javelin president and founder, in a statement. "They are typically younger, on-the-go consumers who use smart phones as their primary tool for communication – including monitoring their bank accounts and making mobile payments. While mobile banking stalled in 2010 as consumers expressed concerns about security and financial institutions focused their attention on the fallout from the economy, the increase in smart phone usage bodes well for the future of mobile banking.”

Financial institutions can look to how consumers use their mobile phones – text messaging, taking photos, emailing and browsing web pages – for clues to their mobile banking interests – receiving text-message alerts, remote deposit capture, mobile person-to-person (P2P) payments and transferring money between accounts, the researchers say.

Selected findings of the 2010 Mobile Banking Behaviors report include these:

• One in five of all U.S. adults now own a smart phone.

• Consumers cite a lack of perceived value, concern about security and cost among the biggest reasons they don’t use mobile banking.

• Mobile banking is done primarily through mobile Internet browsers.

• Only 18 of the top 40 U.S. banks offer mobile banking.

“Large numbers of consumers are switching financial institutions because they want mobile banking,” said Mark Schwanhausser, senior analyst, multi-channel financial services. “FIs need to focus their attention on this burgeoning market and develop a triple play approach of browser, text and application- based mobile banking offerings to maintain consumer loyalty and give consumers the ease-and-convenience options they want.”