The Federal Reserve Board has released its latest "Consumers and Mobile Financial Services" survey. The survey, conducted annually since 2011, examines trends in the adoption and use of mobile banking, payments, and shopping and how the evolution of mobile financial services affects consumers' interaction with financial institutions. As expected, the survey shows continued growth in smartphone use (now 77 percent) and increasing mobile banking adoption (now 43 percent).

The survey is a valuable complement to the Consumer Financial Protection Bureau’s November 2015 report on mobile financial services for the underserved. Both the survey and the report highlight the potential for mobile technology to affect and improve consumers' financial decision-making. In the survey, 62 percent of mobile banking users with smartphones reported using their phone to check account balances or available credit prior to making a large purchase. Of those users, half reported that they made the decision not to purchase an item because of the amount of available funds or credit in their account. The survey also found that 52 percent of mobile banking users receive alerts from their bank and that more than half who receive alerts receive low balance alerts.

There are some interesting findings in the survey from new questions about mobile device security and information sharing. The majority of smartphone users reported taking actions to reduce security risks. Eighty-four percent of smartphone users installed or updated their operating system or mobile apps, 70 percent password-protected their phone, and 58 percent customized their privacy settings. A majority of users remain wary of allowing their mobile device to provide their location to companies where they shop regularly. These behaviors should inform product design.

The Office of the Comptroller of the Currency (OCC) issued a report March 31, 2016, on a related topic—responsible innovation in the federal banking system. We will be sending an alert on the OCC report in the coming days.

Attorneys in Ballard Spahr's Consumer Financial Services Group regularly advise companies on developing products in the mobile channel to ensure compliance with the full range of state and federal consumer financial services, privacy and data protection laws as well as structuring and documenting new consumer financial services products.

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