Self-Service Banking Gets Boost From New Digital Channels

It wasn’t long ago that self-service banking meant punching a keypad on an ATM located at a bank vestibule — after banking hours, perhaps — and getting access to cash or depositing checks.

Banking is moving beyond the confines of the branch setting and ATMs, however, and toward self-service options accessed over digital channels, with the device as chief conduit.

Earlier this year, the PYMNTS Intelligence report “How CUs Can Drive Engagement With Self-Service Banking Innovation” found that among all demographics surveyed, mobile and online banking is the self-service banking option consumers use the most. More than 6 in 10 credit union members said they rely on mobile and online banking the most.

Younger Generations Value Self-Service Options

Roughly a quarter of Generation Z consumers said they choose their financial institution relationships based on self-service banking convenience.

In separate PYMNTS Intelligence research, 90% of top-performing credit unions saw an increase in member satisfaction with their mobile app over the past year, while 83% observed a rise in the number of mobile app downloads.

For banks, there are benefits in the form of increased customer loyalty and satisfaction, as well as reduced operating costs (fewer walk-ins into the branch for ad hoc queries and calls into call centers).

The past several weeks have seen evidence of the continued rise of self-service banking for credit unions and larger financial institutions in an environment where 60% of millennials, 57% of Gen Z and 52% of Generation X primarily use mobile banking apps.

Digital Banking Platforms and Personalization

Earlier this month, Alkami Technology, a digital banking solutions provider, announced a partnership with Intrepid Credit Union to give the latter’s members access to a range of self-service digital banking services, spanning account opening, payments and financial wellness features, which the firms said lead to a more personalized user experience.

Last week, Santander launched its digital bank in the United States, offering high-yield savings accounts, among other things. Executive Chair Ana Botin said at the time that the bank will have a full-service digital bank in the country by the end of next year.

As for some of the largest players in financial services, J.P. Morgan said in its third-quarter earnings report Oct. 11 that active mobile customers were up 7% to 57 million. The company is also opening another 500 branches while renovating 1,700 existing branches.

Bank of America said in its third-quarter earnings report Oct. 15 that digital banking users increased by 5% year over year to 43 million, with mobile users growing by 7% to 35 million. Fifty-three percent of consumer sales now occur through digital channels, up from 48% in the previous year. The company’s artificial intelligence-enabled virtual assistant, Erica — which helps guide customers through their own self-service banking activities — reached 2.4 billion client interactions since its launch in 2018.

“According to Bank of America, Erica now engages with clients approximately 2 million times daily, assisting with everyday financial needs,” PYMNTS wrote at the time.