Is Digital Becoming the New Normal for Banking Customers?

Posted on December 8, 2020December 1, 2020Categories Research  Leave a comment on Is Digital Becoming the New Normal for Banking Customers?
Photo by JJ Ying on Unsplash

The COVID-19 pandemic has challenged traditional banking models and made the digital experience more significant. Even customers not accustomed to banking by smartphone, tablet or personal computer find themselves open to new channels to transact their financial business. Now financial institutions need to come to grips with how the pandemic changed banking and consumer behavior.

The Digital Banking Post COVID-19: Digital CX Banking Report surveyed more than 500 banking customers in June, more than 135 days after the first documented COVID-19 case in the U.S., to explore and describe the mindset and behaviors of banking customers — how the pandemic changed customer needs and wants, and what are their expectations and perceptions of digital banking since the lockdowns.

The shift in consumer tendencies affected most industries worldwide, but especially banking. McKinsey & Co. found more than 75% of buyers and sellers now prefer digital self-serve and remote human engagement over face-to-face interactions. McKinsey also found COVID-19’s impact projects 15 to 20% of banking customers surveyed in Italy, Spain, and the U.S. expect to increase their use of digital channels post-pandemic.

Many financial institutions have yet to see this mindset shift translate into actual user behavior, perhaps due to limitations of their digital capabilities. Should these sprouting inclinations become banking’s new normal, McKinsey anticipates retail banking distribution picking up three years of digital acceleration in 2020 alone.

A DepositAccounts survey, published in September, also discovered most consumers are visiting their financial institution’s branches much less lately and turning instead to mobile banking apps or websites. They found over the previous 30 days, 91% of Americans banked at least once online or on a mobile app; over 40% of consumers are using their bank’s mobile app more often than pre-pandemic; and 52% of consumers visited physical financial institutions less during the pandemic.

Given this new customer leaning, financial institutions may elect to reconsider their revenue drivers, and seek new product introductions and/or updates of their offerings to include extra security, advice-giving services, and more analytics to help recognize relevant niches of potential growth. But how do they choose?

DCX studied customer perceptions and behaviors and categorized them as Traditionalists, who prefer face-to-face branch interaction and will likely return as branches re-open; Transformers, who previously preferred branch interactions but went digital during the pandemic; and Trailblazers, who always preferred digital banking interactions and will continue to do so.

All three clusters exhibited amplified use of digital services during the pandemic, which should come as no surprise. Consumers of all inclinations had to rely on digital services with physical stores and offices not an option. Banking was no exception. All three groups increased their digital banking use, and it is the nuances among these increases that this report will examine. Which habits are temporary, and which will become permanent? How should banks shift their products and services to prepare for the post-COVID world? The Digital CX Banking Report will provide guidance based on customer responses on what they expect and what financial institution should do to overcome concerns.

For a deeper dive into your customers click here for a free report preview; and click here to stay up to date with the latest consumer behavior in digital banking every quarter.

Will Banking Customers Demand More Screen Time Post-Pandemic?

Posted on December 1, 2020December 1, 2020Categories ResearchTags , ,   Leave a comment on Will Banking Customers Demand More Screen Time Post-Pandemic?
Photo by Ilan Dov on Unsplash

Amid the pandemic, U.S. smartphone and laptop usage use is reportedly surging about 45% above normal levels. But screen time differs by generation. How does this affect banking and what does it mean for financial services in a post-pandemic world?

According to a new study by WhistleOut the average American will spend about 9 years or over 76,500 hours on their smartphones alone over the course of their lifetime. Millennials spend about 3.7 hours per day on their phones, Gen X spends about 3 hours per day; and Boomers only spend about 2.5 hours per day on their phones. Eliminate sleep time and millennials spend almost a quarter of their awake time on smartphones; Gen X spends 16.5% of their wakeful lives on a smartphone, and Boomers only spend 9.9% of their awake time on a smartphone.

Digital CX also wanted to find out how much screen time banking customers now spend trying to connect to their financial institutions. The Digital Banking Post COVID-19: Digital CX Banking Report surveyed more than 500 banking customers in June, more than 135 days after the first documented COVID-19 case in the U.S., to explore and describe the mindset and behaviors of banking customers.

We identified three groups of financial institution users: Traditionalists, Transformers and Trailblazers. All three of our groups showed increased use of screen time—digital services—during the pandemic, particularly mobile, as physical locations closed or operated under restricted conditions.

Our profiles showed:

  • Traditionalists—tend to be older than other groups: 61% are 55 or older, just 15% are younger than 35. They are not seeking new experiences in banking. However, 70% use online banking and 35% use mobile banking, even though they are less likely than the other groups to use their financial institution’s mobile app.
  • Transformers—Nearly half (44%) of this group are 25-44 years old. They choose their bank for convenience, which can be a mix of location and digital offerings. They already seem primed for more screen time as 65% use online banking and 56% use mobile banking.
  • Trailblazers—tend to be younger than our other groups; 65% are between the ages of 25 and 44. They welcome the digital transformation of banking services. More than half of Trailblazers use online (55%) and mobile banking services (58%). They are the most mobile-forward group

Although how and when banking returns to normal remains an unanswered question it is likely that digital banking will take on a greater role than before the pandemic with all age groups.

Each of our surveyed groups indicated they want more screen time. More customers seemed willing to use mobile more than actually use it as of early June when we collected the data. This seems like a straightforward opportunity for financial institutions—to offer customers more screen time through their customers’ preferred digital channel.

For a deeper dive into your customers click here for a free report preview; and click here to stay up to date with the latest consumer behavior in digital banking every quarter.