State of Mobile Financial Services in the U.S.

October 27, 2011

So why focus on mobile within the financial industry?

Mobile is becoming an increasingly important servicing channel to
consumers

Mobile may be a way to engage and incentivize consumers to increase their

credit card spend

As consumers begin to feel more comfortable completing more complex

actions from their mobile device the channel may be an effective tool in acquiring new customers

With the introduction of NFC equipped devices mobile may now serve as
the consumers wallet

comScore, Inc. Proprietary and Confidential.

More than one in ten mobile device owners in the U.S. accessed financial related information from their phone in Q2 2011
Total U.S. Mobile Universe: 234 MM
% of Total U.S. Mobile Universe

Mobile Financial User: 36.7 MM

(accessed either banking, credit card, insurance or brokerage information from a mobile device in the past month*)

16%

Mobile Banking User: 32.5 MM

(accessed banking information from a mobile device in the past month*)

14%

Mobile Credit Card User: 18.4 MM

(accessed credit card information from a mobile device in the past month*)

8%

Mobile Insurance User: 7.2 MM

(accessed auto or property insurance information from a mobile device*)

3%

Mobile Brokerage User: 9.6 MM

(accessed brokerage/stock information from a mobile device*)

4% 0% 10% 20%

Source: MobiLens : 3-mth rolling average ending June 2011 *Data also includes those who used text messaging to engage with financial institutions and as well as those who received text alerts.
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Growth in Mobile Usage within Financial Services

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Mobile usage for financial services continues to grow significantly across four key sectors Growth in Mobile Usage within the Financial Industry
(Millions) Mobile Financial Users Mobile Credit Card Users Mobile Brokerage Users Mobile Banking Users Mobile Insurance Users 36.7 33.6 +9% Banking 29.8 32.5 18.4 16.2 8.9 9.6 7.2 Credit Card +14% +9% 28.8 30.3

Q/Q Change

40

30

20

25.0 14.6

26.8 14.9 8.7 6.0

10

8.7

Brokerage Insurance

+8%
+16%

5.9

6.2

0 Sept - 10 Dec - 10 Mar - 11 Jun - 11

Source: MobiLens : 3-mth rolling averages Note: Data includes both customers and prospects who have utilized a browser, app or SMS in the prior month.
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Overall growth in mobile for both card and insurance is being driven largely by an increase in app usage Growth in App Usage Among Mobile Financial Users
(Millions) Mobile Banking Users Mobile Insurance Users Mobile Credit Card Users Mobile Brokerage Users

Q/Q Change
+11%

15
12.7
11.4

10
7.3

8.7 6.0 5.1

+18%

3.8

4.2 3.1

3.4

+10% +24%

2.7

3.2
1.6 1.7 2.1

1.4

Sept - 10

Dec - 10

Mar - 11

Jun - 11

Source: MobiLens : 3-mth rolling averages Note: Data includes both customers and prospects who have utilized an app in the prior month.
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What has influenced this significant growth in mobile within financial services?

Continued adoption of the Smartphone Growth in overall mobile media consumption Importance placed on mobile channel availability by financial customers Influx of mobile optimized sites, Smartphone and tablet app offerings by
financial institutions over the past 12 months

comScore, Inc. Proprietary and Confidential.

Smartphone ownership continues to increase, driven largely by Google and Apple OS, with respective market share up 169% and 9% Y/Y
U.S. Smartphone Penetration Trend by Platform
Market Share 40% 27% 23% 6% 2% 2% % YoY Growth 169% 9% -42% -54% -37% -59%

35.0 30.0

Q2 2011 25.0 Google 20.0 15.0 10.0 5.0 0.0 Apple RIM Microsoft Symbian Palm

Google
Source: MobiLens

Apple

RIM

Microsoft

Symbian

Palm

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The growth in mobile financial users over the past several quarters is highly correlated to Smartphone ownership
Mobile Financial Users by Device
(in Millions)

Smartphones

Non Smartphones 27.6 24.9

20.5 18.2

10.6

9.7

8.8

9.1

Sept - 2010

Dec - 2010

Mar - 2011

Jun - 2011

Source: MobiLens : 3-mth rolling averages Note: Data includes both customers and prospects who have utilized a browser, app or SMS in the prior month.
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Not surprisingly, the importance of mobile as a servicing channel is rated higher among Smartphone users vs. those with a feature phone
Importance of Servicing Channels to Financial Services Customers
(% Indicating Channel is Highly Important)

Feature Phone Owners

0% 20% 40% 60% 80% 100%

Smartphone Owners
0% 20% 40% 60% 80% 100%

Account access via PC / laptop

65% 51% 48% 63% 15% 12% 10% 15% 12% 9% 8% 14% 14% 11% 9% 15%

Account access via PC / laptop

68% 61% 55% 63% 38% 32% 26% 30% 35% 31% 26% 31% 29% 27% 24% 26%

Account access via mobile browser

Account access via mobile browser

Account access via mobile app

Bank Account Credit Card Account Insurance Policy

Account access via mobile app

Access to text message alerts

Brokerage Account

Access to text message alerts

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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Usage of Mobile for Financial Account Servicing

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Financial customers with a Smartphone are younger, more affluent and more often male than those with a feature phone Profile of Financial Customers with a Feature vs. Smartphone
Age Distribution
Feature Phone
51% 24% 17% 20% 21% 16% 19% 7% 18% 5%

HH Income of $75K+
Feature Phone
78%

Smartphone

Smartphone

54%
22%

46%

18-34

35-44

45-54

55-64

65+

Less than $75K

$75K+

Gender
Feature Phone
58%

Intent to Purchase Smartphone

Smartphone
56% (among feature phone users)

11% 12%
Purchase less than 3 mths Purchase in 3-6 mths

44%

42%

63%

14%

Purchase more than 6 mths Do not plan to purchase

Male

Female

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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While Smartphone owners are gravitating towards mobile as a servicing channel it is not necessarily replacing the PC
Usage of PC / Mobile Servicing Channels Among Customers
(Past 12 Months)

Feature Phone Owners

0% 20% 40% 60% 80% 100%

Smartphone Owners
0% 20% 40% 60% 80% 100%

Accessed account from PC/laptop

64% 58% 35% 53% 4% 4% 2% 5% 0% 0% 0% 0% 2% 2% 2% 2%

Accessed account from PC/laptop

72% 61% 46% 55% 25% 18% 10% 21% 19% 13% 6% 11% 8% 6% 6% 7%

Accesed acount from a mobile browser

Accesed acount from a mobile browser

Accessed account from a mobile app

Bank Account Credit Card Account Insurance Policy

Accessed account from a mobile app

Clicked on link in text message

Brokerage Account

Clicked on link in text message

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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Financial customers who are utilizing mobile for their servicing needs are accessing their accounts frequently from their device
Frequency of Channel Usage
Bank Account
Every Day At Least Every 3 Months At Least Once Per Week Every 4-6 Months

Credit Card Account

At Least Once Per Month Every 7-12 Months

3% 21%

9% 19%

7%

3% 9%

6% 16%

0% 10% 26%

13% 13%

6%
31% 15% 52%

26% 46% 37%

56%

52%

41%

42%

50%

28% 19% 17% 18% 22% 6% 15% 26%

12%

Accessed Accesed Accessed Clicked on link account from acount from a account from a in text PC/laptop mobile browser mobile app message

Accessed Accesed Accessed Clicked on link account from acount from a account from a in text PC/laptop mobile browser mobile app message

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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What are some of the obstacles that may be hindering mobile adoption relative to financial servicing?

No more than three in five Smartphone users with a financial account are
aware of even the basic mobile servicing features offered

Satisfaction ratings for the mobile channel are typically lower than for the
PC/laptop, particularly with respect to browser usage

Security continues to remain a concern in the mind of the consumer While mobile device screens continue to get larger, some more complex
activities may not be as easy to perform on a Smartphone even with an app

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Awareness of mobile banking features is 2X greater than utilization, except for checking my balance
Awareness and Utilization of Mobile Banking Offerings
(Among Smartphone Owners)

Checking my balance

32% 23% 16% 16% 16%

57%

Viewing transactions
Receiving bank alerts Finding nearest bank /ATM Paying bills Transferring money Depositing checks remotely Editing bank acct preferences 5% 6%

48%
45%

45%
43% 43% 29% 27%
% Aware of Mobile Banking Features % Utilizing Mobile Banking Features

15%

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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Satisfaction with mobile as a servicing channel is significantly lower than a PC or laptop experience
Satisfaction by Channel PC vs. Mobile
(% Highly Satisfied with Channel Experience)

Bank Account Insurance Policy

Credit Card Account Brokerage Account

79% 79%
70%

74%

70% 62% 54% 55%

66% 69% 52%

61%

60% 61% 52% 52%

Account access via PC / laptop

Account access via mobile browser

Account access via mobile app

Access to text message alerts

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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Security is one of the leading reasons as to why Smartphone users are not accessing financial accounts from their mobile device
Leading Reasons for Not Using Mobile for Financial Servicing
(Smartphone Owners who Have Not Used Mobile Browser or App for Financial Servicing) I prefer to access accounts from PC/laptop
40%

48% 47%
49%

I prefer to visit a local branch/office/ATM

19% 14%

37%

27% 24%
33%

Prefer to call my bank directly

24%
27%

Not comfortable using browser - security

6% 7%
6% 8%

12%

19%

Not comfortable using banking app - security

9%

16%

Too hard to read information from phone

7% 9%

13% 10% 11% Banking Credit Card Insurance Brokerage

Takes to long to access site from my phone

5%

6% 8%

Do not want to pay for app

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)
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4% 6%

7% 6%

Marketing to the Mobile Consumer

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A little more than one in ten mobile owners recalls seeing some type of mobile ad directly from their device
Total Mobile Universe
Frequency of Ad Exposure via Mobile Phone (% Exposed)

16% 14% 14%

Q/Q: +2%

12%
10% 8% 6% 4% 2% 0% % Who Recall Advertisement from Mobile Phone in the Previous Month Every day

41%

31%
Once a week
Several times per month

28%

Source: MobiLens 3-Month Average Ending June 2011

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One in ten mobile users has actively sought financial related information directly from their device Mobile Search and Display Activity
Exposure to Display Ads via Mobile
(Among Financial Services Customers)

Search Activity via Mobile

(Among Financial Services Customers)

0%

10%

20%

30%

0% 10% 20% 30% 40%

I have seen an advertisement(s) for a product or service directly on my mobile device

9%

I have searched for information about products and services through a search engine from my mobile device

26%

I have seen an advertisement(s) for financial services directly on my mobile device

4%

I have searched for information about financial services through a search engine from my mobile device

10%

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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Adoption of New Mobile Devices and Technology

NFC Technology & Tablets

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Despite the recent rollout NFC has gained very little traction in terms of consumer awareness since last quarter
Awareness of Near Field Communication Technology
(Among Current Financial Services Customers)

Future Intent Towards Use of Mobile Waving/Tapping

Likely to Do in the Future

% Aware of NFC % Unaware of NFC

Replace paper tickets for movies

15%

Replace paper tickets for concerts

15%

Replace credit/debit/cash at retailers

15%

39% 61%
Q/Q: P. Pt. +1%

Replace paper tickets for air travel

14%

Replace tickets for transportation

13%

Verify your identity

13%

To pay family / friends (i.e. P2P)

12%

Source: Financial Services MobiLens Re-Contact Survey (Apr Jun 2011)

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One in ten financial customers with a mobile device also owns an iPad of which half indicate accessing their back accounts from their tablet
Tablet Ownership and Usage within Financial Services
Mobile Tablet Ownership
(Among Current Financial Services Customers)

Accessing Financial Accounts via iPad

(Among Apple iPad FS Customers)

Banking Insurance
Apple iPad Kindle Blackberry Playbook Samsung Galaxy Tab Nook Motorola Xoom Other 3% 3% 5% 5% 10% 10%

Credit Card Brokerage

48%
Used Apple iPad to Access Financial Services

31% 17% 22%

2%

Source: Financial Services MobiLens Re-Contact Survey (Jan Mar 2011)

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In Summary

Increasing adoption of the Smartphone has allowed for greater mobile

media consumption

As a result of importance placed on the mobile channel by customers the

financial services industry has responded by rolling out mobile optimized sites and apps over the past year

Generating incremental awareness of mobile servicing options and apps, in

particular, should serve not only to increase usage but make for a more satisfactory consumer experience

Security continues to remain a leading concern for financial services

customers, most notably in the banking sector

As we see more and more consumers purchase tablets, we would expect to

see movement towards these device for more complex actitivities or transactions (i.e. stock trading, opening accounts, etc.)

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Questions?
Please contact:

Stephanie Houck
shouck@comscore.com 312-775-6498

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