Migration to mobile and digital banking ramped up during the pandemic. This we know. Signs are that it’s a hit with consumers. Many have shifted for keeps. This we are finding out.
It’s one of numerous revelations in PYMNTS’ Leveraging The Digital Banking Shift Report, a collaboration with Feedzai, based on a survey of nearly 2,200 U.S. account holders. It confirms that legions of consumers have shifted to online and mobile banking since the pandemic's arrival, and across demographic boundaries, people like it.
“Our research shows that 46 percent of consumers became ‘digital shifters’ since the pandemic's onset, using online or mobile banking ‘somewhat’ or ‘much more’ than they did before the pandemic,” the new study states, with mobile banking seeing the biggest shift at nearly 45 percent of mobile banking users increasing their use, and 38.2 percent of online banking customers using digital channels more.
The change is lasting, in other words, and PYMNTS’ Leveraging The Digital Banking Shift Report contains a treasure trove of data and analysis for making the digital banking shift easier, safer and more delightful for its millions of new fans.
A Lasting Shift
Financial institutions (FIs) had leaned into online considerably before COVID-19, but there remained untapped market potential that took an extra push to access. Now, digital banking is the rage among consumers for the original reasons — speed, control — and it’s touchless, too.
“Our research shows digital banking habits are already entrenched among consumers but that they have tended to use them in conjunction with in-person and analog banking methods,” per Leveraging The Digital Banking Shift. “At least half of all consumers say they typically use four out of five specific forms of banking: online banking, mobile banking, visiting branches and visiting ATMs. One method is more rarely used: calling FIs — only 4.8 percent of bank customers say they commonly do so.”
Among the most meaningful findings is the fact that digital shifters intend to stay that way.
As the report notes, “Most consumers across banking styles plan to keep at least some of the changes they made during the pandemic — a trend that is especially strong for digital services” Almost 44 percent mobile banking adopters will continue banking that way, another 34.7 percent will maintain some of the changes, and 74 percent of online users are sticking.
Fraud Fears, And Loyalty
Along with the legit digital shift come the digitally shifty — fraudsters — and that’s a big worry among all digital banking consumers, some more than others.
For example, having been victimized by fraud before makes people reticent and affects usage.
“Experiencing fraud plays an important role in how consumers perceive the risk” of digital banking, the report states. “Those who have experienced [fraud] have heightened concerns that it will happen again, with 51.3 percent of mobile banking users and 53.1 percent of online banking users who have been subject to fraud at least ‘somewhat concerned’ about this.”
By comparison, PYMNTS found that 35.7 percent of mobile banking customers who have not experienced fraud are actively worried about fraud in new digital banking experiences.
As for how this is affecting loyalty and retention, at least in the early going, consumers who opened new accounts and cards during the pandemic depths tended to do so with their current FI and not a competing institution or FinTech.
“We found that 19.9 percent of those who opened new checking or savings accounts stuck with their current banks and just 3.3 percent went to different ones,” per the report. “A similar pattern is visible with new credit card accounts — an area dominated by a handful of large banks — with 11.9 percent of individuals opening new accounts with their current institutions while 5.7 percent went to different ones.”