NEW YORK–A new analysis offers some insights and predictions into what consumers can expect from financial institutions as digital banking becomes the new normal.
Brett Holzhaur, writing on Forbes.com, said the pandemic has accelerated trends that arose in 2020 are setting the stage for a digitally focused banking future that’s arriving somewhat earlier than imagined.
Among those trends, according to Forbes.com:
Larger Investments in Enhanced Cybersecurity Tools
“While the increase in digital banking among consumers isn’t exactly a new phenomenon, the significant uptick in consumers’ use of mobile apps and websites for their banking transactions in 2020 creates a prime target for hackers. Because of this, banks and credit unions are pouring resources into digital security to protect consumers’ information and proprietary information,” Holzhaur wrote. “According to the Deloitte Center for Financial Services Global Outlook Survey 2020, 71% of bank leaders expect their organizations to increase cybersecurity spending, with cloud computing/storage and data privacy rounding out the top three areas of needed improvement to combat the risk of data breaches.”
The Creation of Long-Term Customer Relationships Through Seamless Digital Tools
In a year that involved, for many, plenty of downtime with stay-at-home orders imposed across the country—mixed in with the reality of growing financial insecurity faced by millions—Americans had to take a closer look at their financial circumstances, the Forbes.com report stated.
“Because of this, consumers leaving and selecting a new bank is an expected trend post pandemic, Holzhaur said. “Foresight Research published a survey in October, involving nearly 11,000 bank and credit union members in 44 markets, suggesting that large multi-location banks (like Chase and Bank of America) will experience significant customer churn over the next two years.
“In an industry built on having human connection at branches, banks and credit unions are now faced with the challenge of keeping consumers engaged in an age of digital banking and social distancing,” the report continued. “Part of retaining consumers in this changed environment is providing excellent tools, resources and services as part of the customer experience.”
Holzhaur noted Chase recently released the results of its Digital Banking Attitudes Study, conducted with 1,500 consumers, including Chase and non-Chase customers ages 18 to 65. The study revealed Americans have largely adjusted to—and are ready for—a primarily digital banking environment.
The Findings & Forecast
Among the findings:
- Four in five customers prefer to manage their finances digitally rather than in person
- Roughly eight in 10 use a smartphone and/or desktop/laptop to complete banking activities
- The vast majority of Chase (89%) and non-Chase (85%) customers feel they save time by managing their finances digitally
- Nearly 70% of Chase customers, and 60% of non-Chase customers, completely or somewhat agree that they feel confident about the safety and security of making payments through digital apps or sending money through peer-to-peer apps
- Only 10% of Chase customers and 14% of non-Chase customers completely or somewhat agree they do not typically manage their finances digitally because technology overwhelms them
Balancing In-Person and Digital Banking
Digital resources and tools are now a large focus for financial institutions and will be for the foreseeable future. But where does personal interaction come into play in this traditionally in-person business? asked Holzhaur.
“Whether it is conducted in person at a branch, online through a chat bot or a combination of the two, the banking relationship—built on some form of loyalty to a financial institution—isn’t simply linked to chasing the highest interest rate or sign-up bonus,” the Forbes report noted. “This important relationship is an interpersonal one, based in part on believing your financial assets are secure and feeling your needs are met. Without a human touch to the customer experience, consumers may begin to feel disconnected from their financial institution, potentially leading to ongoing customer churn.”