In January 2020, we surveyed financial services customers to better understand the state of digital banking and its outlook for the future. Then, in August we reached out again to understand the pandemic’s impact on consumer attitudes. We wanted to understand How much more are consumers using digital banking since the pandemic? Will consumers continue to use digital services at the same level after the financial services industry “returns to normal?” Does higher digital usage lead to increased customer satisfaction for financial services organizations?
How much more are consumers using digital banking since the pandemic? “Have you been using your financial services organization’s digital banking more since the start of the pandemic?” 52% Yes 37% No 11% About the same Only Boomers+ show an increase below 50% and Millennials, at 70%, show the biggest jump. % of consumers who have increased their digital banking use, ranked by financial services organization. 67% Direct Bank 59% Large Bank 48% Regional Bank 28% Community/Credit Union At direct banks, digital is already the primary method of transacting business. Large bank digital use can be attributed to their younger customer base, and to significant investments in technology. “How often do you currently use your primary financial services provider’s digital banking products each week? January 2020 August 2020 Daily via Desktop 17% 29% Daily via App 36% 40% Not only has daily use increased during the pandemic, people who use digital services daily are also more likely to report that their financial services organization understands their digital banking needs. “How did you learn to use your financial services provider’s digital services?” On my own 69% With videos and other tools 23% By phone 7% Late adopters are more likely to need help, and are also more likely to feel their provider doesn’t understand their digital needs.
Will consumers continue to use digital services at the same level after the industry “returns to normal?” “Do you plan on maintaining your usage of digital services after banks resume regular in-person banking?” Yes 87% No 2% Not sure 11% Digital usage is not a temporary change. Nearly 9 in 10 customers who increased digital usage plan on maintaining that use even after in-person banking returns to normal. “For the following transactions, what will be your preferred method of interaction after the pandemic is over for the following transactions?” Percentages who answered “Branch visit with banker.” January 2020 August 2020 Applying for a loan 47% 41% Opening a deposit account 46% 40% Getting advice about a product or 45% 32% Solving a problem with an account 27%26% In-person (Branch) banking is still the #1 method for opening a loan or deposit account, but that preference is declining. Meanwhile, the preference to open a deposit account over the phone nearly doubled from 6% to 11%, while doing so via text or video chat tripled, from 2% to 6%.
Does higher digital usage lead to increased customer satisfaction with financial services organizations? “Does your primary financial services provider understand your digital customer experience needs?” January 2020 August 2020 Gen Z 77% 77% Millennials 74% 84% Gen X 64% 77% Boomers+ 59% 64% Early adopters are also more likely to feel their financial services organization understands their digital needs (89%) than late adopters (56%). % of consumers who feel their financial services provider understands their digital needs, ranked by financial institution. Direct Bank 89% Large Bank 77% Regional Bank 76% Community/Credit Union 61% “Does your financial services provider meet your digital needs?” January 2020 August 2020 84% 91% “Would you switch financial services providers for a better digital experience?” January 2020 August 2020 50% 47%
Customer satisfaction was high pre-pandemic, and is now even higher. Yet nearly half of all customers would still consider switching for a better digital experience. Customers who would switch providers for a better digital experience, by generational segment. [Refer to slide 14 in “BBO_Digital2_9 1 2-“ doc] January 2020 August 2020 Gen Z 61% 54% Millennials 62% 67% Gen X 48% 45% Boomers+ 28% 21% Millennials are the only generation more likely to switch for a better digital experience since the pandemic, probably as a result of their increased digital banking use. “What is your biggest frustration with your primary financial services provider’s digital banking capabilities?” “Fear of fraud or lack of security” Gen Z 37% Millennials 27% Gen X 42% Boomers+ 46% Fraud and a lack of security were, by far, the biggest digital concern from customers both before and during the pandemic. While this fear is universal across all generations, older generations are the most apprehensive. Insights. • Financial services organizations should capture the accelerated momentum of digital usage caused by the pandemic to build customer loyalty into the next “normal.” • Providing a good digital experience is a must. Even though consumers feel their digital needs are being met by their financial services organization, most would still switch for better digital services. • Financial services leaders who can solve security concerns may benefit substantially from increased online account opening. Partnering with FinTechs could be a solution. • While most consumers feel their financial services provider’s digital tools are intuitive enough to use without support, making digital tools easy to use may attract late adopters or those who are less tech savvy. Learn more at bai.org/research