Inflation Gives Banks Opening to Become Consumers’ Trusted Financial Adviser, Says Truist

More consumers are struggling with their finances and budgeting. A recent survey found that 55% of Americans are in a difficult financial position, up 37% year over year. Digital banking tools can help, according to 47% of consumers, and while they have grown more reliant on their mobile banking apps, customers are especially interested in proactive help from their financial institutions (FIs).

The digital pull is so strong that consumers would switch banks for better technology capabilities, including 70% of millennials and Generation Z. Traditional FIs, challenged by new customer acquisition and increased competition from digital-first upstarts, have a clear mandate to create more meaningful digital engagement that meets consumer demands.

The “Digital-First Banking Tracker®” explores how traditional banks compete with FinTechs and neobanks to retain and win clients and earn coveted primary bank status among more consumers.

Around the Digital-First Banking Space

The Asia-Pacific (APAC) region is a hotbed for consumer confidence in digital banking, as 6 in 10 consumers trust FinTechs and neobanks more than traditional banks. Mobile app use is strong across the region, which has given rise to digital challengers, thanks to a changing competitive environment fueled by the proliferation of digital banking licenses throughout APAC.

In the United Kingdom, digital challenger banks lead the way in customer service. The best-reviewed banks include digital challengers, while traditional banks ranked at the bottom for customer satisfaction. Customers were particularly displeased with traditional banks’ support for budgeting and spending, leaving much ground to make up in customer service and digital capabilities.

For more on these and other stories, visit the Tracker’s News and Trends section.

An Inside Look at Building Client-Centered Digital Banking

Digital banking has accelerated rapidly, but it is still more of a marathon than a sprint. Winning more customers with digital tools and features requires knowing when and how to layer on the human touch for clients who increasingly face economic hardships. A culture of innovation is a must, and banks must start to think more like software companies as they address customer needs at scale.

To get the Insider POV, we spoke with Truist’s Sherry Graziano, head of digital banking and contact centers, and Ken Meyer, chief information and experience officer, to learn more about how banks are driving client-centered digital-first innovation that meets customers when and where they are.

Traditional Banks Can Meet the Moment With Robust Digital Offerings

Digital-first challengers have gained market share, but traditional banks maintain their advantage as consumers’ primary choice of bank. Banking customers still have needs they believe are best served in person at a branch, with just 9% of customers having their primary accounts with digital-only banks. Traditional banks’ edge can be fleeting if they are cannot provide digital tools and features to help increasingly anxious consumers seeking proactive support in better managing their finances.

Cost is a significant barrier for incumbent banks in adopting new technology, with 62% of U.S. community banks considering cost as the most important impediment to adopting new technologies. Partnering with FinTechs represents an opportunity to ditch legacy systems in favor of modern, automated technology that aligns with customer preferences.

To learn more about how traditional banks compete on the digital front, read the Tracker’s PYMNTS Intelligence.

About the Tracker

The “Digital-First Banking Tracker®,” a collaboration with NCR, examines how traditional banks are stepping up with digital offerings to better serve the evolving needs of customers, especially those experiencing financial challenges in a difficult economic climate.