If open banking developments in the European Union (EU) are any indication of what’s coming to America — that’s been the case in recent years — then it’s open season for open banking.
“A new survey of European FI customers is … indicating the massive pandemic-related shift to digital banking. Sixty-six percent of respondents said that the pandemic has accelerated their adoption of digital onboarding services for opening bank accounts,” according to PYMNTS’ latest Digital-First Banking Tracker®. “The survey also revealed that 70 percent of European FI customers have accounts with challenger banks or neobanks, and the same portion noted that these digital-only FIs provide better customer experiences than legacy banks.”
Legacy banks and financial institutions (FIs) are aware of the encroachment of digital-first banks into what, until fairly recently, was their turf. But a somewhat blasé approach to digital transformation hasn’t paid off for legacy banks, as Q2 performances showed. Now, they’re getting serious in a hurry.
“Some FIs are abandoning branches entirely in favor of digital banking options, such as mobile banking apps or web-based bank portals, allowing customers to maintain their financial lifestyles without setting foot in branches,” the Tracker states.
“A recent study found that digital banking was the number one way consumers interacted with banks, using apps and browsers for more functions than ever before. Citigroup saw an 84 percent increase in daily mobile check deposits in May, for example, while digital bill payments increased by 78 percent between February and April.”
It’s happening across the FI terrain, with PYMNTS recently reporting that that 33 percent of credit unions, for example, are now offering digital loyalty innovations, up from 29.4 percent in 2018.
As banks shore up cash reserves ahead of expected business failures resulting from the pandemic, they’re taking a hard look at the future of physical branches, touchless ATMs and ITMs, and perhaps most importantly, the way that digital-first banking capabilities can be layered onto legacy systems.
Tune in on Tuesday, July 28 at 12 p.m. ET as PYMNTS CEO Karen Webster and senior leaders from NCR, OnDot, PSCU and Truist discuss How Banks Are Innovating for Digital-First Excellence post-COVID, on PYMNTS TV.