NYC Department of Consumer Affairs Releases First Municipal Study on Mobile Technology and Money Management: New Yorkers Have High Mobile Phone Ownership and Mobile Banking Usage

NEW YORK, November 17, 2015 /3BL Media/ – The Department of Consumer Affairs (DCA) today announced the findings of the New York City Mobile Services Study, the first study to examine mobile banking and cell phone ownership at a municipal level. The study’s findings show that New York City is a unique marketplace for mobile banking and money management innovation, as nearly all respondents owned a cell phone (96 percent), and approximately 80 percent of cell phone owners had a smartphone. These rates exceed the national averages of 87 percent and 71 percent respectively. Additionally, rates of smartphone ownership were particularly high among immigrant respondents, those who are younger (between the ages of 18 and 29), the underbanked, and those with higher incomes. The findings were released at a presentation and panel discussion today at Capital One Labs.

“Financial services are evolving, and now we’re evolving with them,” said Mayor Bill de Blasio. “The continued development of mobile banking brings New Yorkers’ finances to their fingertips, and through the DCA Office of Financial Empowerment, the City can ensure that these services—particularly popular among the unbanked and underbanked—are best serving the consumer.”

In partnership with the Cities for Financial Empowerment Fund (CFE Fund) and with the support of Capital One and MetLife Foundation, the DCA Office of Financial Empowerment commissioned RTI International to conduct this study to analyze the needs, barriers, and opportunities to increase financial inclusion through mobile financial services use. An interactive, visual data tool is also available along with the findings. The study determined that more than half of New York City respondents reported using mobile banking in the last 12 months. The study found that there was a strong consumer preference for passive engagement with their financial accounts through mobile phones. This means that consumers are more comfortable receiving text or email alerts from their bank or credit union, rather than inputting personal data through mobile applications or “apps,” as security concerns still weigh heavily for some consumers.

“DCA’s Office of Financial Empowerment is committed to ensuring New Yorkers, particularly those with low incomes, have access to safe and affordable financial services and products,” said DCA Commissioner Julie Menin. “Mobile technology and online money management are key tools that allow New Yorkers to quickly and easily access and manage their finances. The NYC Mobile Services Study provides important insight into how government, financial institutions, and the tech sector can connect New York City residents with mainstream banking.”

“Policymakers, financial institutions, and others committed to expanding banking access are increasingly looking to mobile devices for the future of large scale solutions,” said Jonathan Mintz, President and Chief Executive Officer, Cities for Financial Empowerment Fund. “This study provides not just a snapshot of New Yorkers’ current mobile banking usage, but promising guidance on the best path toward expanding those connections - most particularly by beginning with passive mobile banking services like text alerts.”

Investments in mobile financial services and technology are growing at unprecedented rates, with an estimated $12 billion in investments last year alone. This study sheds light on how these investments can better serve consumers, especially the unbanked and underbanked populations.

“Expanding access to financial services through mobile technologies is a key pathway to empower more consumers to have greater control of their financial lives,” said Phil Kim, Head of Data Product Innovation at Capital One Labs in New York City. “We’re proud to support the City’s mobile services study, which provides valuable insights that will help New York City’s growing fintech ecosystem fuel innovations that will ultimately help more people have better control of their money and financial future.”

“MetLife Foundation is pleased to have funded this thoughtful and important research. Globally, from New York to Nepal, we are funding  more in mobile and digital channels as we see, from research like this, that technology has the potential to revolutionize how low and moderate income people manage their finances and interact with service providers,” said Dennis White, CEO and President, MetLife Foundation.

Additional key findings from NYC Mobile Services Study include:

Ownership of mobile phones, including smartphones, was higher among New York respondents than national averages.

• Nearly all respondents reported owning a cell phone (96 percent), and approximately 80 percent of cell phone owners had a smartphone.
• Mobile phone usage and ownership varied somewhat by banking status, with about 95 percent of banked respondents reported owning a cell phone, 79 percent of whom owned a smartphone. Approximately 90 percent of unbanked respondents owned a cell phone, with 73 percent reported having a smartphone, and 98 percent of the underbanked owning a cell phone, 80 percent of whom had a smartphone.
• Immigrant respondents and those who were between the ages of 18 and 29 were among the highest groups to have a smartphone at 93 percent and 94 percent respectively.

More than half of New York respondents use mobile banking and mobile payments.

• Sixty-three percent of respondents used some form of mobile banking in the last 12 months. Mobile banking refers to the use of mobile phones to access your bank or credit union account, via phone web browser, text messaging, or mobile app, downloaded to your mobile phone.
• The unbanked were most likely to use text or email alerts (74 percent), and use of text and email alerts decreased as age increased, ranging from 81 percent among those between 18 and 29 and 50 percent among those over the age of 60.
• Fifty-one percent of respondents reported using mobile payments, which is also higher than the national rates (22 percent). Mobile payments refer to purchases, bill payments, charitable donations, payments to another person, or any other payments made using a mobile phone.

Security concerns still weigh heavily among some consumers.

• Unbanked consumers were particularly concerned about the safety of their personal information when using mobile banking services (49 percent).
• Of those who said that they do not use mobile banking, 55 percent cited concerns about privacy and data security as a significant barrier to usage.
• The study found that if these concerns are adequately addressed, more New Yorkers might be willing to adopt mobile banking and payments due to the convenience of these services.

While usage of mobile financial management services was less common, there is a growing interest in using apps for money management.

• Only 23 percent of respondents reported using mobile financial management services, which include using a mobile phone to budget, track expenses, or help make financial decisions.
• The underbanked (35 percent) and those between the ages of 18 and 29 (44 percent) reported that they were more likely to use mobile financial management services.
• About a third of respondents (28 percent) stated that they would be interested in using an app to manage their financial behaviors. Immigrant respondents (39 percent) and those between the ages of 18 and 29 (41 percent) were particularly interested.

Earlier this year, DCA OFE released two studies – Where Are the Unbanked and Underbanked in New York City? and How Do New Yorkers Perceive Their Financial Security – that looked at New Yorkers’ use of banks and their perceptions of financial security. These studies found that 360,000 households in New York City do not have a bank account and additional 780,000 households, or one in four, were underbanked, meaning they had a bank account but also used alternative financial services. Furthermore, one in three New Yorkers expressed dissatisfaction with their personal finances. The combination of these three studies presents DCA and its partners with a strong foundation to guide future programmatic and policy efforts that make financial services via mobile technology more accessible, safe, and empowering for New Yorkers, and specifically for the unbanked and underbanked populations. Armed with the evidence from this study, government, nonprofit, financial institutions, and technology companies can better build inclusive and consumer-friendly products and services. DCA also released a toolkit for other cities to use as a model to explore mobile financial services on a local level.

About NYC Department of Consumer Affairs
The Department of Consumer Affairs (DCA) licenses, inspects, and educates businesses, assists and informs consumers, mediates complaints, and offers free financial counseling and safe banking products. DCA enforces the Consumer Protection Law, the Paid Sick Leave Law and other related business laws throughout New York City and licenses nearly 80,000 businesses in 55 different industries. For more information, call 311 or visit DCA online at nyc.gov/consumers or on its social media sites, Twitter, Facebook, Instagram, and YouTube.

About The Cities for Financial Empowerment (CFE) Fund 
The CFE Fund supports municipal efforts to improve the financial stability of households by leveraging opportunities unique to local government. By translating cutting edge experience with large scale programs, research, and policy in cities of all sizes, the CFE Fund assists mayors and other local leaders to identify, develop, fund, implement, and research pilots and programs that help families build assets and make the most of their financial resources. For more information, please visit www.cfefund.org or email us at info@cfefund.org. Follow us on Twitter @CFEfund or like us on Facebook.

About Capital One
Capital One Financial Corporation, headquartered in McLean, Virginia, is a Fortune 500 company with branch locations primarily in New York, New Jersey, Texas, Louisiana, Maryland, Virginia, and the District of Columbia. Its subsidiaries, Capital One, N.A. and Capital One Bank (USA), N. A., offer a broad spectrum of financial products and services to consumers, small businesses and commercial clients. We apply the same principles of innovation, collaboration and empowerment in our commitment to our communities across the country that we do in our business. We recognize that helping to build strong and healthy communities – good places to work, good places to do business and good places to raise families – benefits us all and we are proud to support this and other community initiatives. www.capitaloneinvestingforgood.com.

About MetLife Foundation
MetLife Foundation was created in 1976 to continue MetLife’s long tradition of corporate contributions and community involvement. Since its founding through the end of 2014, MetLife Foundation has provided more than $670 million in grants and $70 million in program-related investments to organizations addressing issues that have a positive impact in their communities. Today, the Foundation is dedicated to advancing financial inclusion, committing $200 million to help build a secure future for individuals and communities around the world. To learn more about MetLife Foundation, visit www.metlife.org.

Media Contact
Abigail Lootens
Department of Consumer Affairs
(212) 436-0042
press@dca.nyc.gov