African-Americans are banking on the move. A recent report from Pew Research found that African American and Hispanic people are taking the lead when it comes to mobile banking. The research found that 51% of adults in the U.S. bank online and 35% of cellphone owners bank using their phone.
Among the findings in the Pew study was that the popularity of mobile banking continues to grow among minority groups, especially African-Americans, nearly doubling in two years. Forty one percent of non-whites reported using their smartphones to check their bank balances and make payments. This includes 39% of African-Americans.
Another report from the Federal Reserve Board also found that Black and Latinos were significantly more likely to use mobile banking than whites.
None of these numbers surprised the experts. African-Americans and Latinos appear to be more comfortable using mobile technology and have higher ownership rates of smartphones than whites. In 2010 survey numbers showed that 45% of Latinos and 33% of African-Americans owned smartphones while only 27% of whites did. That number grew to 71% by 2013, while the national average was only 62%.
The question has to be why? In a report on Diversityinc.com Assistant Professor of Communications at Rutgers University Vikki Katz said that socioeconomic factors are the reason. She highlighted additional data from Pew research showing African-Americans, compared to other groups, had less overall access to home-based broadband. “Higher rates of mobile banking are not surprising among individuals who, if they choose to do online banking, can only do so via a mobile device,” she said, “as opposed to being able to choose between doing so on a mobile phone or a PC.
A more telling factor is revealed by Dedrick Muhammad Executive Director of the Financial Freedom Center who stated; “Historically, access to brick-and-mortar banks is not as prevalent in African-American communities,” he said, adding that many banks charge higher fees to bank in person than online. “So you have a cheaper product, using a cheaper means that provides greater access to African-Americans. It makes sense that African-Americans use mobile banking more.”
Breaking It Down
African-Americans are using mobile banking for different reasons. And Mr. Muhammad hit it on the head. Many black communities simply do not have banks close by. Or grocery stores either! There are vast empty commerce deserts in black communities where businesses simply do not go. You can find the exploiters there like liquor stores and check cashing businesses but not much else. I am not blaming the businesses. There are problems in these communities. But the working black people there have discovered how to manage their money electronically. They go to their smartphones. And how many of these neighborhoods offer high speed Internet anyway? Starting to get the picture? Now let’s visit the other end of the socio-economic scale. Higher income African-Americans expects ease and convenience just like higher income whites. They have access to the technology, the high speed connections and are early adopters of mobile technology. Banking on the go offers them more freedom to manage their busy lives. Black people have to adapt and sometimes quickly. Mobile technology helps us to overcome the hurdles we encounter. And mobile banking is a big help.