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Qualitative Research on 

Mobile Financial Services for 

Underserved Consumers

Presentation to the 

Chairman’s Advisory 

Committee on Economic 

Inclusion

October 30, 2015
Research Objective

2

Our motivation is to 

understand underserved 

consumers’ perceptions of 

the potential of mobile 

financial services (MFS) to 

improve access to, sustain, 

and grow banking 

relationships as well as to 

understand the factors 

limiting its potential.

This document reports 

findings from the consumer 

focus groups conducted 

during the first two phases of 

this research effort.
Research Methodology

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• Eighteen (18) focus groups were 

used to collect qualitative data about:

‒ Consumer financial needs

‒

‒

Financial product and provider 

usage and awareness

Usage and opinions regarding 

mobile financial services

HOW?

WHEN AND WHERE?

•

•

•

Memphis, TN – May 6-7, 2015

Los Angeles, CA – May 12-13 and 

July 14-16, 2015

Kansas City, MO – July 20-21, 2015

WHO?

•

•

•

•

•

•

172 total participants

A mix of unbanked and underbanked

A mix of current mobile financial services 

users and non-users

Smartphone owners

Mix of English and Spanish speakers

Mix of other demographic characteristics
• The methodology for the consumer research follows standard industry 

practices for gathering qualitative feedback. However, there are 

limitations to these practices. 

‒

‒

‒

Samples are small and based on convenience sources, which limits the 

degree to which results can be generalized across the entire population 

of underserved consumers.

Consumers who met precise combinations of criteria were sought out 

over others.

Qualitative data is subject to varying interpretations although this was 

addressed by involving multiple researchers in the review of findings and 

the use of qualitative research software to compile and analyze the data.

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Limitations of Research
•

•

•

•

This report discusses consumer reactions to financial providers 

and services.

There may be instances where consumer perception does not 

accurately reflect the current policies of banks or standards in the 

financial industry. 

In some instances, consumers may have strong opinions formed 

from misunderstood facts. 

Researchers did not correct these misunderstandings during data 

collection but instead aimed to gain insight into how consumers 

currently view the financial industry. 

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Consumer Perception
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Needs from Financial 

Management Methods
Consumer 

Needs

Long-Term 

Financial 

Management

• Advice from providers on long-term financial

planning

• Access to long-term credit products (mortgage,

auto loans, etc.)

• Access to investment products

Security

• Broad term

used for

protection

from threats

• Safety

against

theft, both

physically

and digitally

• Protection

against

identity

theft and

data

breaches

• Privacy

• Safeguards

against

financial

institution

failure or

mistakes

Customer 

Service

Convenience Affordability

Control

Underserved consumers have emotional needs of control, 

security and long-term partnership when it comes to finances

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• Knowing exactly

when and how

money is deposited

and withdrawn from

accounts

• Confidence that

transactions are

processed quickly

• Absence of

unexpected fees

• Choice in payment

methods

• No limits on ATM

withdrawals or inperson transactions

• Ease of long-term

record keeping

Access to 

Money
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Consumer 

Needs

Long-Term 

Financial 

Management

Security

Customer 

Service

• Representatives

available through

consumer

preferred channel

(varies by

consumer)

• Representative

available at

convenient time

to consumer

(varies by

consumer)

• Lack of excessive

wait times to

connect with

representative

Affordability

• Low/no fees for account

maintenance, overdraft, individual

transactions, check cashing, money

order, bill paying, deposits, cash

withdrawal, speaking with a

customer service agent

• Predictability in fees

• Help minimizing “avoidable” fees

Convenience

• Saves time or effort

• Financial providers have

locations close to work or

home

• Financial providers have hours

past normal business hours

• •Access to online and mobile

tools

Control

Access to 

Money

• Access to funds as soon

as they are received by

financial provider

• Short hold times from

financial provider

• Short hold times from

vendors

• Quick resolution of

account problems (such

as suspected fraud)

which freezes accounts

• Quick return of money

debited from accounts in

error

This demographic also has practical needs of access to money 

convenience, affordability and quality customer service
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Financial Product s and 

Providers Used by 

Underserved Consumers
Benefits

Drawbacks

Cash has perceived benefits and drawbacks while most 

consumers see checks as replaceable with newer products

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• Quick access to money

and information about

funds

• Cheap way to conduct

transactions

• Cannot spend what is

not currently available

• No risk of identity theft

• Easier to spend

• Large amounts draw

attention

• Must physical go to get

cash

• Lack of records

• Can be lost or stolen

with little recourse

• Costs money to

purchase checks

• Takes time to reach

recipient

• Not universally

accepted

• Can have long hold time

• Can be a delay if payee

does not deposit

immediately

• Checks can bounce

• Easy and convenient

way of payment

• Widely accepted Cash Checks
Benefits

Drawbacks

Money orders and prepaid cards are popular with underserved 

consumers despite certain drawbacks

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• Widely accepted

• No threat of bouncing a

money order

• Payee cannot take more

than expected as

payment

• Creates a record and is

traceable

• Can be replaced if lost

or stolen

• Fees to use

• Must physically go to

pick up money order

• Cost to cash out if no

longer needed

• Funds cannot be

overdrawn/no overdraft

fees

• Perceived faster and

easier access to money

• Perceived rotection from

identity theft

• Useful if customers do

not want to disclose

bank account numbers

• Funds not insured the

same way as bank

funds

• Cannot be used with

vendors that require

additional holds (hotels,

rental cars, etc.)

• Inadequate customer

service

Prepaid 

Cards

Money 

Orders • Perceived lower fees

than bank accounts
Drawbacks

Peer-to-peer payments are used by fewer underserved 

consumers but very popular with users

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• Easy to use

• Focused on mobile

technology

• Can hold money like a

bank account

• Minimal information

needed for peer-to-peer

transfers

• Funds not insured the

same way as bank

funds

• Some consumers not

comfortable with

technology and lack of

physical locations

Benefits

Peer-toPeer 

Payments
Underserved consumers use a variety of financial providers 

depending on preferences and circumstances

Banks 

Prepaid card companies

Non-bank deposit account companies, like 

Paypal

Retailers, such as Walmart

Payday lenders and pawn shops

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Bank and Credit Unions shine on long-term financial 

management

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+Help overcome financial trouble

+Access to additional financial products 

+ Laws that protect 

money

+ Security systems

+ Refund stolen 

money

– Digital access can 

give thieves a way 

in 

+Available and 

effectiveness of 

in-person agents

–Not treated as 

valuable

–Telephone CS

–Understanding 

pending 

transactions’ 

impact on 

current balance

–Overdraft 

protocols 

+Multiple locations

–Banking hours

–Lack of CS with mobile/ 

online transactions

+Has overdraft protection

–Perception of being expensive 

given fees/min. balances

–Unpredictable fees

–Storage fees

–Long time to access 

to newly deposited 

funds

–Long time to access 

bank credits

–Payee holds

Banks 

& 

Credit 

Unions

Long-Term 

Financial 

Management

Security

Customer 

Service

Convenience Affordability

Control

Access to 

Money

Blue = Strong Gray= Weak
+Wide acceptability 

+Online and mobile management features

+Personal information not connected to card

+Immediate debit

Prepaid cards maximize the feelings of control for underserved 

consumers 

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+Instant fund availability

+Avoid late fees

–Hard to withdraw cash/ 

in-network ATMs

+Use for in-person 

and online 

transactions

+No need for branch 

locations and hours

–Merchants 

requiring holds don’t 

accept PP cards

+Temporary place 

to keep partial 

funds

–Hard to get 

refunds on lost/ 

stolen cards

–Don’t have 

federal consumer 

protections

–Need to call for help/no inperson help

–Automated phone menus or 

staffed by those in other 

countries

+Fees are reasonable

+Cheaper than overdraft fees

+Predictable fees

–Very little help 

provided

Prepaid 

Cards

Control

Access to 

Money

Convenience

Affordability Customer 

Service

Security

Long-Term 

Financial 

Management

Blue = Strong Gray= Weak
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Mobile Financial Services
Providers and word-of-mouth are key sources of MFS 

information; tech savvy consumers find apps on their own

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Financial 

Services 

Providers

Word-ofMouth

Online/

App 

Store

Consumers learn about app/mobile capabilities at account 

opening, through emails, the providers website, paper 

statements, at the branch/physical location, customer 

service agents, and TV commercials. 

More technology-ready consumers often find out about the 

financial apps searching online or in the app store on their 

phone. These types of consumers are more interested in and 

have more faith in technology, and look out for new apps.

Many consumers first learn about MFS tools through 

friends and family. They feel comfortable asking friends 

and family questions and are able to turn to them when 

they have problems.

Checking

account 

balances

Alerts

Bill 

Pay

Transfer 

Features

Feature adoption as consumers become more 

comfortable with MFS
Setup of mobile financial services is straightforward and easy 

for most consumers

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$ BANK

Mobile Financial Services Setup

+Larger screen

+Keyboard

+Security

+Convenience +Ensure proper setup

+Secure 

Mobile Phone Computer Financial Institution
Summary of Mobile Financial Services

Mobile Financial 

Service Benefits Consumer Needs 

Addressed

Checking Balance and 

Transaction History

• Access to account information anytime 

and anywhere

• Saves time/trips to providers

• Helps budget

• Helps inform on the spot spending 

decisions

• Control

• Convenience

• Long-Term Financial 

Management 

Alerts

• Access to account information

• Helps consumers avoid fees

• Helps monitor accounts for fraud 

• Control

• Convenience

• Affordability

• Security

Bill Pay

• Ensure timely payment

• Can save money over other methods

• Saves time/trips to providers

• Ability to pay bills anytime and anywhere

• Control

• Convenience

• Affordability

Peer-to-Peer Transfers

• Settle personal debts immediately

• Faster than other methods

• Saves time/trips to providers

• Control

Convenience

Remote Deposit 

Capture

• Helps deposit money faster

• Saves time/trips to providers

• Control

• Convenience

• Access to Money

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Nearly all underserved MFS users check their balances and 

transactions from their phone frequently

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The most common MFS activity is checking balances and 

transaction histories; many consumers use this feature daily

When do consumers 

check?

– Right when wake-up

– Just before bed

– After a specific event/purpose

– Before spending money

Why do consumer check?

– Expecting a paycheck to be 

deposited

– Checking for fraudulent activity

– Verifying there is an issue after 

getting a message or alert from 

financial service provider
Underserved consumers have widely adopted alerts which help 

them effectively manage their finances

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Text

Commonly Used Alerts

Faster

Easier to receive

Attention grabbing

Quicker and easier to digest

Texts are for personal 

communication only

Greater detail

Longer-lasting record of 

financial transactions

Often overlooked due to 

quantity of emails received

Daily balance alerts – Low balance alerts – Deposit alerts – Fraud alerts

“Text-it’s immediate. 

Email, you have to go in 

and actually be checking 

your email account.” 

– Underbanked MFS

User

How 

consumers 

receive 

alerts

Email
Ability to pay bills through mobile phone, anytime, anywhere

Mobile bill pay adds convenience but does not meet needs of 

last minute payers

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Typically no charge from payee and no charge from the bank

There is a record of the transaction if dispute is needed

Ability to schedule automatic recurring payments

Not good for when need to pay bill quickly, better to go through payee website

Questions about how long until payment is debit and reaches the payee

“Somebody always 

magically says that they 

didn’t get paid. So you 

know I know I can take a 

screen shot and send it 

over and let them know its 

paid.” – Underbanked MFS 

User

“It seems to me that unless 

you’re changing it 

frequently, you’re just 

tapping you thumb. Boom, 

boom, boom, you’re done. 

That’s it. It’s over with, 

then. Like I say, if you want 

to do it at 3:00 in the 

afternoon, you don’t have 

to wonder if the office is 

closed.”– Underbanked 

MFS User
Peer-to-Peer Transfers

Peer-to-Peer transaction providers focus on digital solutions to 

sending and receiving money

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“And there’s so many other 

services that will do it 

immediately that I feel like 

people aren’t going to wait for 

two days or whatever if they 

know there’s another way that 

they can get it right away.” –

Unbanked MFS User

How long does it take to 

debit an account and reach 

the recipient? How secure is this payment 

method? 

All digital 

transactions

Expectation 

of quick 

debit and 

credit

Minimal 

account 

information 

needed
• Saves time

• Fewer trips to the bank

• Where does the image go?

• How fast is it processed?

• What should I do with the check?

• Is it secure?

• Takes too long to credit account

• Unbanked consumers already

have ways of accessing money

from checks

Consumers intrigued by mRDC but have many questions

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mRDC

“It takes away from having to 

actually having to go down to 

the banks. Depending on the 

time, there’s going to be a 

bunch of people, you’re going 

to be standing in line...” 

– Unbanked MFS Non-User

“Anything over like $500, it 

takes three business days 

– otherwise it’s the next

day. But that’s the same in 

the ATM or anywhere 

else.”– Underbanked MFS 

User
Most consumers are wary of opening an account from a mobile 

device

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Fear of fraud

Lack of 

personalized 

service

Questions about 

process/paperwork

Convenient

$

Mobile Account 

Opening
Security and privacy are the main barriers to adoption of MFS for 

underserved consumers

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Security of the 

App

Losing Account 

Information 

Interrupted 

Transactions

Exposure to 

Unwanted 

Forms of 

Communication

There is concern about how 

unfinished transactions are 

handled when using MFS. 

Consumers are aware that personal information 

is often shared or sold to other companies. 

They don’t want to be exposed to 

communication they are not interested in 

receiving. 

Underserved consumers are considered 

about losing account numbers and 

passwords that are stored in the app, they 

believe this could open them up to theft and 

possibly loss of access to their money.

Many non-users have concerns about identity 

theft and fraud. Those that currently use MFS 

believe though that the benefits outweigh the 

risks when it comes to security.
Mobile financial services have a positive impact on consumers 

who have adopted them

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• Fewer in-person 

visits

• Can view balance 

and make 

transactions 

anytime, anywhere

• Can use greater 

information to 

help avoid fees

• Real-time access to 

account information

• Information more 

frequently than without 

MFS

• Gives tools to proactively 

manage money

Positive Impact 

of MFS

Affordability

Convenience Control
• Visuals and Financial Breakdowns

• Consumers believe they would benefit from highly visuals summaries of 

their finances. These tools would help with long-term financial 

management.

• Increased Customization

• Most MFS tools are customizable but consumers want the ability to tailor 

tools even more to their specific needs. Integration with other tools is a big 

part of this customization.

• Consistency of Information and Features

• Most users have experience with online and in-person banking and know 

what can be done in other channels. Consumers want all features to be 

available on all channels.

• MFS Based Customer Service

• Current users see opportunities to increase communication and make MFS 

a two-way channel for getting assistance.

Consumers suggested a variety of ways to add more value to 

mobile financial services

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$

=
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Opportunities for Banks in 

Mobile Financial Services
Long-term financial management a strength banks should work 

to maintain

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• Bank strength 

that has the 

potential to be 

bolstered 

further by MFS 

tools

Consumer Need Consumer

Perception:

Banking Services

Consumer

Perception:

MFS relative to other 

channels

Long-Term

Financial 

Management

Very Strong Superior

Control Weak Superior

Convenience Weak Superior

Affordability Weak Superior

Security Strong Inferior

Customer

Service Strong Inferior

Access to 

Money Very Weak Similar
Control, convenience and affordability are opportunities for 

banks to better meet consumer needs through MFS

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• Increase control 

through greater access 

to account information 

(record keeping, 

balance alerts, etc.)

• MFS gives consumers 

anytime, anyplace 

access physical 

branches currently lack

• Greater and more 

timely access to 

account information can 

help consumers avoid 

fees that lead to the 

perception of banks 

being expensive

Consumer Need Consumer

Perception:

Banking Services

Consumer

Perception:

MFS relative to other 

channels

Long-Term

Financial 

Management

Very Strong Superior

Control Weak Superior

Convenience Weak Superior

Affordability Weak Superior

Security Strong Inferior

Customer

Service Strong Inferior

Access to 

Money Very Weak Similar
Banks perform well on security and customer service and will need to protect 

this image from consumer concerns about MFS generally

• Outside of MFS banks 

are seen as secure

• Many consumers fear 

hacking, fraud or lack of 

privacy when using 

MFS

• Banks offer customer 

service lacking from 

many other providers

• Consumers believe 

customer service will be 

lacking in MFS

Consumer Need Consumer

Perception:

Banking Services

Consumer

Perception:

MFS relative to other 

channels

Long-Term

Financial 

Management

Very Strong Superior

Control Weak Superior

Convenience Weak Superior

Affordability Weak Superior

Security Strong Inferior

Customer

Service Strong Inferior

Access to 

Money Very Weak Similar
• Banks’ ability to 

provide fast access to 

money is perceived to 

be very weak 

• MFS does not offer 

any inherent 

advantages in this 

area

MFS will not be able to raise perceptions of access to money 

through banks without other policy and product changes

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Consumer Need Consumer

Perception:

Banking Services

Consumer

Perception:

MFS relative to other 

channels

Long-Term

Financial 

Management

Very Strong Superior

Control Weak Superior

Convenience Weak Superior

Affordability Weak Superior

Security Strong Inferior

Customer

Service Strong Inferior

Access to 

Money Very Weak Similar
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Conclusion
Conclusions

1. Underserved consumers select financial products and 

providers based on needs related to control, convenience, 

fast access to funds, affordability, security, customer 

service, and long term financial management.

2. Consumers perceive that banks have limitations: control, 

fast access to funds, affordability, and convenience.

3. MFS improves banking (control, convenience, 

affordability) and helps create more sustainable banking 

relationships.

4. MFS is not sufficient to engage underserved consumers in 

banking.

• System wide improvements required (real time payments)

• MFS doesn’t appeal to everyone

• Many reasons for being unbanked are unrelated to MFS (lack of 

funds, distrust) 

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• The next phase of the research will collect information 

from financial institutions and other industry participants to 

help us better understand their experiences with and 

views on the use of MFS as an economic inclusion tool

• Structured interviews will be conducted in late 2015

• Comprehensive project report with implications from both 

the consumer and industry research will be published in 

Spring 2016

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Next Steps