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Financial Services Law Insights and Observations

FDIC Issues White Paper on Mobile Financial Services

FDIC Mobile Banking

Consumer Finance

On May 25, the FDIC published a report titled “Opportunities for Mobile Financial Services to Engage Underserved Consumers.” The report is the product of FDIC qualitative research with consumers and industry stakeholders regarding mobile financial services’ (MFS) potential to increase economic inclusion. The report identifies the following areas as core financial needs for underserved consumers: (i) control over finances, noting that consumers want to know precisely when and why money is withdrawn from an account; (ii) access to money, stressing that consumers expect financial providers to make funds available as quickly as possible; (iii) convenience, emphasizing the value consumers place on features that save time or effort when making a transaction; (iv) affordability, commenting that consumers aim to “minimize or avoid fees for account maintenance and everyday transactions”; (v) security, emphasizing consumers’ need for protection from theft of funds or personal information; (vi) customer service, with a consumer expectation for having access to live help through their preferred banking channel; and (vii) long-term financial management (i.e., advice on money management or the availability of tools to meet financial goals). According to the report, mobile banking “helps meet consumer needs in areas where traditional banking is perceived to be weak.” Specifically, the report states that mobile banking improves the convenience of banking services, helps consumers maintain better control of their finances, and, in some cases, is more affordable than traditional banking. The FDIC concluded that “consumers make tradeoffs when selecting financial services on certain financial needs.” As such, the report makes suggestions based off consumer feedback as to how both MFS and traditional banking services can better streamline their products to best benefit the underserved, and how to address consumers’ real and perceived fears about the security risks of using MFS.

The FDIC’s report follows a May 3 letter seeking input regarding the FDIC’s plans to explore the economic inclusion potential of MFS. The FDIC requested that all feedback be submitted by June 15, 2016.