eMarketer Webinar: Financial Services 2015 Outlook—Mobile Comes into Focus

© 2014 eMarketer Inc.

Financial Services 2015 Outlook—

Mobile Comes into Focus

Bryan Yeager

Analyst

November 12, 2014


Agenda

Consumer attention and activity are shifting to mobile

Financial marketers are ramping up mobile investments

Pushing toward an omnichannel future

Key takeaways

Twitter – #eMwebinar


Consumer Attention and

Activity Are Shifting to

Mobile


Almost half of

US adults’

media time is

being spent

with digital …

… and almost

half of time spent

with digital media is on mobile



Mobile is pulling consumers away from the

desktop



Digital banking is increasingly common in the US

By 2018,

6 in 10 adults

will be digital

banking users



Mobile phone and tablet banking are quickly

catching on among adults

74.5

93.3106

37.647.1

54.8

2013 2014 2015

Mobile phone Tablet

US Adult Mobile Banking Users, by Device (millions)

Twitter – #eMwebinarSource: eMarketer, Aug 2014


Major banks are drawing millions of customers

to their mobile banking apps

16.1 million users

18.4 million users

13.7 million users

Source: company reports, Q3 2014Twitter – #eMwebinar


Result: Mobile is now the preferred banking

channel for 1 in 10 US consumers

22% of US internet users access mobile banking at least

once per week

31% of US mobile bankers access their mobile banking

app at least once per day

Twitter – #eMwebinarSource: American Bankers Association, 2014; YouGov, Sep 2014; Bank of America/Braun Research, May 2014


Mobile banking

will continue

its growth

trajectory

9 in 10 US adult

digital banking users

will also be mobile

banking users by the

end of 2018



Smartphone

bankers

comprise the

bulk of mobile

banking users

Half the US adult

population is

projected to use

smartphone banking

by 2018



Penetration is already strong among younger

adults

The bulk of

growth is coming

from older adults

moving off the

sidelines



Key drivers for mobile banking usage growth:

Overall mobile device user growth and increasingly

widespread mobile internet usage on these devices

More robust functionality, including mobile remote

deposit capture, peer-to-peer payments, enhanced

security measures, personal financial management tools

and simplified user interfaces

Larger mobile device screen sizes will help consumers

avoid transaction errors and improve interactions

Concerted marketing and advertising efforts by financial

institutions to push customers to use mobile banking



Security and privacy concerns remain primary

inhibitors to greater mobile banking usage

More than one-third of

the US smartphone

owners worried about

insufficient wireless

network security

protection when

accessing financial info

28% were concerned

about losing their device

or having it stolen



Despite a

fragmented

landscape,

proximity mobile

payments will

grow

aggressively in

the US over the

next five years



Mobile

payment user

growth is a key

contributor to

increasing

transaction

values through

the forecast

period



Larger

purchases

by more

users will

spur growth



Apple Pay brings hype, increased competition to

mobile payments in the US

The announcement of Apple Pay on Sept. 9, 2014,

generated a massive amount of media hype, which may

help raise mobile payments consumer awareness.

The choice of using near field communication (NFC) for

Apple Pay helps provide clarity to the market in terms of

technology standards.

Apple is competing with many existing platforms from

other tech firms, mobile carriers, retailers and other

payment providers.



Consumers are bullish on a mobile payments

future

More than half of

US internet users

believe mobile

payments will be

widely used in the

next five years

23.2% were

certain about

widespread

adoption



Financial Marketers are

Ramping Up Mobile

Investments


62% ($3.9B): Spend

dedicated to direct

response objectives

in 2014

35.5% ($2.2B):

Spend dedicated to mobile

advertising in 2014


Digital ad

spending is

rising


Mobile ad spending will outpace the desktop in

2016

$32.4 $31.7$30.1

$26.9 $25.4 $24.2

$10.7

$19.0

$28.5

$40.2

$49.4

$58.8

2013 2014 2015 2016 2017 2018

Desktop Mobile

US Digital Ad Spending (billions)

Twitter – #eMwebinarSource: eMarketer, Sep 2014


Users are

increasingly

coming

across

financial

services ads

on their

mobile

devices



Facebook advertising is efficient but requires

testing to be effective

“ Facebook advertising is relatively cost

efficient for us. I wouldn't say we've

absolutely perfected it … We’re

constantly testing messages,

creative and new targeting

options. It is a beautiful thing that

you are able to overlay so many

different factors and interests.”

—Alison Mittelstadt, head of digital marketing

at Personal Capital



Financial

services

advertisers

are dedicating

more dollars

to digital

video



Mobile video gets consumers engaged

“ More money needs to roll into mobile

from a video and a rich media

perspective even faster. Every time

we’re doing a lift study after a

video campaign, we’re seeing

that consumers are engaged.”

—Anthony Iacovone, founder and CEO of

AdTheorent



Digital ad KPIs are also evolving as marketers

become more sophisticated

“ A lot of companies are using basic

media metrics to optimize their

programs. Not every [acquired]

account is going to drive the

same value to their business

… More sophisticated clients are

starting to think about, as well as

implement, value-based KPIs.”

—Gil Biegacz, director of category strategy

for financial services at Rocket Fuel



Data-driven marketing is second nature to the

new breed of financial startups

“ As a startup, we, by necessity, have

to be extremely frugal and meticulous

in tracking all of our spend and

determining the value of all of our

digital marketing efforts. To

characterize the company as

data-driven is really an

understatement. We’re part ‘Mad

Men’ and we’re part data geeks. We

live and die by the numbers.”

—Alison Mittelstadt, head of digital marketing

at Personal Capital



Pushing Toward An

Omnichannel Future


Financial firms face competitive threats from

growing tech companies



Banks’

biggest

challenges

include

satisfying and

retaining

increasingly

demanding

customers



Mobile is an important innovation area in

financial services to help meet user expectations



Breaking down marketing silos: Is talk becoming

reality?

“ We’re starting to see some of the

silos come down from a client’s

perspective. Traditionally, financial

firms are structured where they have

a branding group and a direct

response group … I think in 2015,

we’re going to see more

alignment to take a full-funnel

approach to executing campaigns.”

—Gil Biegacz, director of category strategy

for financial services at Rocket Fuel



Alignment with external partners is also critical

“ One of the things that we're going to

do for the first time in our short life is

hold an agency summit where we're

going to bring together all of our

external partners… We have some

very ambitious conversion and growth

goals for next year and we want to

make sure that we're all

aligned.”

—Alison Mittelstadt, head of digital

marketing, Personal Capital



Making moves to stay innovative and transform

+

+

+Twitter – #eMwebinar


Banks are looking to online and in-branch

innovations to deliver more customer value



Beacons can bridge the digital divide, bringing

attribution to branch locations

“ We’ve had conversations with a few

firms about beacon technology

within branch locations, so that

when we serve an ad to a user,

specifically on mobile, we can

attribute that user to visiting a location

and put those two things together. It’s

all anonymized through hashed IDs

between the two systems.”

—Anthony Iacovone, founder and CEO of

AdTheorent



A variety of

new mobile

banking

capabilities

are planned

for 2015



Delivering unified experiences can drive digital

sales

“ Financial firms have to start

connecting three experiences: the

public site, the authenticated

space and mobile apps. People

are constantly bombarded with

messages; you need consistency

between the three if you are really

going to drive sales.”

—Christopher Young, director of industry

strategy for financial services at Adobe



Navy Federal Credit Union leverages its tablet

apps for credit card account acquisition

“ Consumers can learn about all the

features that each of the various

cards offer and then they can apply to

get that card via their mobile device.

We’re looking at expanding our

acquisition pieces to offer a

membership application probably

early next year, as well as looking at

consumer lending.”

—Meghan Gound, assistant vice president

for e-channels at Navy Federal Credit Union



Customer experience is a powerful marketing

vehicle

“ Our most effective marketing channel

is the actual moment when the

customer experiences us in our store

or on our website. We put a lot of

emphasis into the experience that the

customer has because, at the end of

the day, that experience is far

more powerful than anything

we can say.”

—Vinoo Vijay, CMO at TD Bank



Key takeaways

More consumer time spent with digital and mobile media is

changing how consumers prefer to engage with financial

institutions.

Mobile banking and mobile payments will reach key

milestones in 2015.

Financial marketers are adapting their budgets, strategies

and tactics for 2015 to reach consumers across digital

touchpoints at the right time and context.

Firms are trying to perfect the omnichannel experience to

fend off competition and meet heightened customer

expectations.



Meet with eMarketer at NetFinance!

Contact Alexia Vlosky ([email protected])

or Bryan Yeager ([email protected])

to schedule a meeting

December 2-4, 2014 – San Diego, CA

mailto:[email protected]

mailto:[email protected]


Planned Financial Services Topics for 2015

Digital Insurance Industry Trends

US Financial Services Industry 2015 Digital Ad Spending

Digital Video in Financial Services

Role of Digital in Loan Products

Role of Digital in Credit Card Products

Global Mobile Payment Trends

Updated Digital Banking + Mobile Payment Forecasts


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Bryan Yeager

Financial Services 2015

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