Report: State of Mobile 2023 – Mobile banking comes of age

As this industry enters 2023, we are genuinely navigating uncharted waters: the “post-COVID” era is upon us as consumers emerge from almost three years of pandemic life.

Pent-up demand for travel and real-life experiences are capturing a larger share of wallets as consumers become more comfortable with post-pandemic life.

Yet, macroeconomic headwinds bear down on global markets and consumers feel the squeeze of inflation.

State of Mobile 2023, shows that more than ever, mobile apps are the leading indicator of these shifting consumer behaviours. Our phones and tablets are now appendages of ourselves— often the first port of call for action, reaction, and connection.

The bright news is demand for mobile apps has never been greater, yet we are seeing the first-ever cooling of consumer spend on app stores due to macroeconomic conditions.

We enter 2023 at a competitive boiling point:

• Peak Daily Usage: Time spent per day has reached 5 hours in the top mobile-first markets.
• Downloads Boom: Mobile services broke records at 255 billion downloads — with global consumers downloading more than 485,000 apps per minute.
• Dollars Follow the Eyeballs: Mobile ad spend is on track to hit $362 billion in 2023, after surpassing $336 in 2022 despite tightening marketing budgets.
• Wallets Get Lighter: App Stores spend has cooled to $167 billion (-2% YoY) for first time ever due to decline in gaming spend, which was previously bolstered by pandemic conditions; non-gaming mobile services and subscriptions reached record spend.

Financial services

Consumers Love to Bank on Mobile: Mobile app adoption across top subgenres like Mobile Banking, Digital Wallets & Payment, and Personal Loans saw rapid growth in 2022, continuing the accelerated push to mobile that began at the start of the pandemic in 2020.

Meanwhile, economic concerns such as high inflation have left their mark on the FinTech space. Personal Loans apps have flourished across North America, Asia, and Africa.

Cryptocurrency Trading apps took a notable downturn in 2022, along with the turbulence in the cryptocurrency market that resulted in the downfalls of cryptocurrencies like Luna and crypto exchanges like FTX.

FinTech Remained Highly Localised, Especially in APAC: Unlike many other parts of the app economy, FinTech has continued to be quite localised, with the majority of country’s downloads coming from publishers based in that market.

Given the high barrier to entry in understanding and adopting each country’s unique financial rules and regulations, it is not surprising that knowing the local market is a huge advantage for local based companies.

The local advantage is strongest in APAC, and China, Japan, and South Korea in particular. More than 99% of China’s finance downloads were from local companies, while Japan and South Korea had local publishers account for more than 93%.

Pressure from Neobanks Drives Traditional Banks in The UK to Improve Their App Experience: While the user bases for traditional banks still dwarf those from neobanks, neobanks have managed to close the gap in user engagement.

Average monthly time spent per user for top neobanks trailed traditional banks by just 3.5 minutes in 2022.

With the new source of competition vying for consumers increasingly open to online banking during the pandemic, traditional banks have needed to improve their mobile offerings as well.

US Neobanks Improve but Still Lag UK Success: Average monthly active users among the top five neobanks in the US climbed from 1.4 million in 2020 to 2.2 million in 2022, with Chime as the clear market leader in both active users and user engagement.

However, the top five traditional banks still averaged more than 10x the number of MAU as neobanks.

Similar to the UK, most mobile banking apps saw an uptick in both active users and average time spent between 2020 and 2021 as consumers become increasingly comfortable using their mobile devices for banking.

Time spent growth slowed in 2022 as the US continued to open up, though banking apps were able to maintain positive momentum in terms of adding active users.

US Consumers Look to Cash Advance Apps to Ease Inflation Pain: Cash advances and early access to paychecks have been a common feature across fintech apps in the US in recent years. For example, Dave advertises getting up to $500 instantly.

US cash advance downloads spiked in 2022, increasing 44% YoY. This aligns with the increased search traffic in the App Store for “cash advance”.

In fact, the only dips in cash advance demand correspond with the COVID-19 stimulus checks, which eased the financial stress on US consumers during the beginning of the pandemic.

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