Use of Mobile Phones in Financial Decisionmaking

As the use of mobile banking increases, mobile phones are increasingly becoming tools for managing personal finances and controlling spending. For example, 63 percent of mobile banking users with smartphones report using their mobile phone to check account balances or available credit before making a large purchase in the 12 months prior to the survey. Of those who checked their balance or available credit, 53 percent reported that they decided not to buy an item because of the amount of money in their bank account or the amount of available credit. Many consumers have near-constant access to their mobile phones, and these results illustrate that these devices have the potential to provide "just-in-time information" that can influence consumer financial behavior.

In addition, mobile phones can provide readily accessible and timely prompts that may help consumers make different, and perhaps smarter, financial decisions. The actions consumers take in response to the receipt of text message or e-mail notices from their financial institutions demonstrate some of the potential effects of this technology for encouraging consumers to engage in different financial behaviors that may prove to have beneficial outcomes.

More than half (57 percent) of people who use mobile banking receive alerts from their bank (figure 11). Nearly all mobile banking users who received a low-balance alert from their bank reported taking some action in response: transferring money into the account with the low-balance (44 percent), reducing their spending (28 percent), or depositing additional money into the account (31 percent) (figure 12). Only 17 percent reported taking no action in response to receiving a low-balance alert.

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