Consumer Concerns Over Privacy, Security Ease as Comfort With Mobile Tech Safeguards Grows: KPMG Survey

NEW YORK, July 22 /PRNewswire/ -- The booming growth in the use of mobile technology has apparently made U.S. consumers more comfortable with safeguards as fewer are expressing concern about privacy and security on their wireless devices and networks, according to the results of a recent global "Consumers and Convergence" survey by KPMG LLP, the audit, tax, and advisory firm.

KPMG found that 48 percent of the U.S. consumers surveyed on the use of technology (e.g. computers, smart phones, mobile applications and the internet) were very concerned about privacy when using a mobile device, which was down from 58 percent when KPMG conducted a similar survey in 2008.  By way of further comparison, 54 percent of consumers said they were very concerned about security in this year's survey, compared to 65 percent in 2008. The U.S. findings on this question were lower than the global findings in the survey that consisted of more than 5,000 consumers in 22 countries. Globally, when using mobile devices, 67 percent said they were very concerned about security and 59 percent indicated they were very concerned about privacy.

"The evolving U.S. consumers' sentiment about privacy and security speaks to their greater familiarity and understanding of the convergence of computers, mobile devices and content, and how they can use the technology and services to their benefit," said Gary Matuszak, Global Chair, Information, Communications and Entertainment.  "Anywhere you turn, you can see examples of this, whether it's a person checking their email, texting, buying movie tickets, watching a video, listening to music, updating their Facebook status, or checking their bank account balance on their mobile phone."

The growing comfort of U.S. consumers with mobile technology is reflected in the survey results which showed more U.S. consumers indicated they were comfortable conducting financial transactions such as mobile banking and mobile credit card transactions than they were in the previous survey.  Comparing the new survey to results 18 months ago, the U.S. group of respondents who said they were comfortable grew by 6 percent, to 16 percent, and those not comfortable declined by 11 percent, to 55 percent. In contrast, about one-third of the consumers globally in the new survey said they were comfortable making financial transactions on a mobile phone.

Consumers' Attitudes Toward Tracking Is Shifting

The KPMG survey also found a significant change in the attitude of U.S. Consumers toward personally identifiable information.  In the latest survey, about half of the consumers said they would be willing to allow their (mobile or desk top) online usage and personal profile information to be tracked, if this would result in lower costs.  This compares to one-third who were willing in 2008.

"As content and service providers continue to search for ways to make advertising more acceptable, U.S. consumers have recognized the value of their personal information and are willing to leverage their power for a better deal," said Tony Castellanos, U.S. Communications and Media sector leader.

The U.S. consumers' willingness to negotiate the use of their personal information appears to translate to a willingness to accept advertising when accessing online content/services in return for lower prices or free content and services, though there is a clear distinction between advertising on a personal computer and on a mobile device. About half of the U.S. consumers surveyed (five percent less than globally) would accept advertisements on their PCs, but only 28 percent in the U.S. (42 percent globally) would accept them on their mobiles.

A First Look at Mobile Access to Personal Medical Information

In light of the movement toward more efficient use of medical records in healthcare data systems to improve medical care, KPMG asked consumers how comfortable they will feel accessing personal medical information on mobile devices in the next 3 to 5 years. About one-fourth of U.S. consumers surveyed said they would be comfortable, while nearly four in 10 would not.  Globally, the responses were the opposite with about 40 percent comfortable, and about one-quarter not.

Some Willingness To Pay for Online Content

A major problem for content providers has been turning their Internet presence into revenue, but KPMG's survey results suggest consumer attitudes may be shifting here as well.

In the U.S. about one-quarter said they are now willing to pay for access to frequently used online content whether by mobile device or desk top computer, compared to 43 percent of consumers globally. India and China were the clear global leaders at 65 percent and 63 percent respectively. Least willing to pay are consumers in the Netherlands, at only 6 percent, followed by Ireland with 12 percent, Canada with 15 percent, and Germany with 17 percent.

It's also interesting to note that U.S. consumers are among the least likely to download free movies, music and video games from file-sharing sites, as only 39 percent said they have done so.  In comparison, in the growing markets of Brazil, Russia, India and China, on average, about twice as many consumers in those countries than in the U.S. have downloaded content for free from file-sharing sites, and a significantly greater number of consumers in the BRIC countries than American consumers frequently download free content from the file sharing sites.

Consumer Use of Mobile Phones for Financial Transactions Remains A Mixed Bag

While American consumers have become more comfortable using their mobile phones for financial transactions, the U.S. still trails much of the world in the use of mobile devices for financial transactions.

More than 10 percent of the U.S. consumers indicated in the new survey that they used their mobile phone to buy something from a retailer's mobile site. This doubles the 2008 responses but trails global consumers (28 percent) who bought from retail mobile sites.

About two out of 10 U.S. consumers in KPMG's 2010 survey have done mobile banking, doubling the 2008 findings, though well short of the global consumers' rate of 45 percent. Part of the challenge may lie in the U.S. consumers' lack of awareness about mobile banking services.  Half of the U.S. respondents said they didn't know whether their bank offered mobile banking and only one-fourth said their banks did.  This is in stark contrast to the rapidly emerging markets of Russia, India, Brazil and China where the vast majority of consumers surveyed, ranging from 62 percent in Russia to 73 percent in China, said their banks offer mobile banking.

Digital Devices and Mobile Applications Have Become A High-Powered Combination

The explosive growth in digital devices and mobile applications in the last few years is reflected in KPMG surveys of consumers, and senior executives at hardware, software, communications and media companies in the U.S.

Chatting and instant messaging, after having a 4-5 percent mobile phone usage rate in 2007 and 2008, and talking over the internet (eg. Skype) now are mobile phone mainstays, with 30 percent and 49 percent of U.S. consumers naming these uses respectively in KPMG's new consumers and convergence survey.  American consumers in KPMG's survey accessed maps and directions on their mobile phones three times more often than in 2008. Social networking on mobile phones hovered at 1-2 percent until this year when 10 percent of U.S. consumers said they use their mobile phone for social networking.  

This growth explains the optimism noted in a recently conducted separate KPMG survey of communications and media company senior executives in the U.S. announced in June.  A total of 83 percent of the survey respondents said they expect revenue increases from digital device/services this year, with 46 percent of them predicting that their revenue growth will be 7 percent or more.  At the same time, they view new product introductions, wireless/mobile applications, and digital device platforms as the biggest revenue drivers over the next three years.

Technology hardware and software company senior executives in the U.S. also see mobile applications as a key opportunity for their companies. In a recently announced separate survey, when participants were asked to name the biggest drivers of revenue growth over the next three years in the technology sector, 51 percent cited mobile applications, second to only cloud computing.  About half of the tech executives believe the growth rate for mobile applications could be greater than 10 percent over the next two years.

Cloud Computing On the Minds of Consumers and Businesses

About half (51 percent) of U.S. consumers use cloud computing-based services, such as Google mail, Hotmail, Picassa, etc., according to the new survey findings.  The KPMG consumers and convergence survey found that among those who do not, 41 percent cited "not aware of such services" as the reason for not using a cloud computing-based service.  The same amount cited "no need for such services."  Less than 15 percent noted concerns about privacy and security as a reason for not using the cloud-based services.

The consumers' sizable use of cloud services and the sizeable segment that could be attracted to cloud services together are one of the reasons that technology executives view cloud computing as a key opportunity. In the recent KPMG survey of technology hardware and software company senior executives in the U.S., when participants were asked to name the biggest drivers of revenue growth over the next three years in the technology sector, 54 percent named cloud computing the top pick, just ahead of mobile applications. About half of the respondents believe the growth rate for cloud computing could exceed 10 percent over the next two years.  The tech industry executives' optimism also is fueled by the cloud computing potential for the business and government sectors.

The KPMG Consumers and Convergence IV Survey

The consumers' insight in this press release come from "Consumers and Convergence IV", the fourth edition of a regular survey examining how consumers use technology, carried out by KPMG's global Information, Communications and Entertainment practice.  Covering 22 countries, the 2010 report surveyed more than 5600 people, including 300 people in the U.S., on their day-to-day use of mobile and personal computer technology.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S. member firm of KPMG International Cooperative ("KPMG International.")  KPMG International's member firms have 140,000 professionals, including more than 7,900 partners, in 145 countries.

SOURCE KPMG LLP