As COVID-19 has interrupted many lives and continues to do so, finances continue to be at the forefront of concern for millions around the world. With bank closings or operating at limited hours or by appointment, consumers have had to find other ways to access their funds and make their purchases.
Today, consumers are opting for digital banking in order to stay connected to their financial institutions.
PYMNTS’ “Leveraging The Digital Banking Shift Report,” a survey of almost 2,200 U.S. account holders and conducted in partnership with Feedzai, reveals that a mass of consumers have migrated to adopting online and mobile banking services since the start of the COVID-19 pandemic.
According to the study, the digital format has become the number one way that consumers access their accounts and open new ones. The results also demonstrate that 30% of consumers have opened new accounts in just the past three months.
Even with this new trend, there are pros and cons. Without question, being able to do your banking from home without unnecessary exposure brings convenience and peace of mind. However, it also opens up consumers to fraudulent cyber attacks. Almost one-third of respondents have expressed concern about potential fraud. Over the past 12 months, 50% of consumers have shared that they have experienced fraud directly.
Security and trust are a cause for concern among consumers, given that most of those consumers that have opened new banking accounts have done so within their respective banks. More than 50% have done so because they already trust the current financial institution they work with.
More than 50% of consumers who preferred “in-person banking” have intensified their use of online and mobile banking since the pandemic broke. Furthermore, almost three-quarters of consumers said they intend to keep these new banking habits, even after normal life has resumed.
More Key Findings
The largest portion of banking customers are “mainly digital”, which means they use mobile and online channels the majority of their time for their banking. In fact 44.8% fall into this category. A smaller 21.6% consider themselves “omnichannel”, meaning, they use digital channels as well as physical channels such as banking branches or ATMs.
Almost 40% of consumers across all age groups consider themselves mainly digital. This includes both baby boomers and seniors.
There are, however, some differences in banking methods according to different generations. It was found that 75.9% of Generation Z members are most likely to use mobile banking. While 72.7% of seniors and baby boomers visit branches.
Another key point found was that, in light of the potential threat of fraud, more consumers want alternative account authentication methods outside of passwords and PINs. The three authentication methods that they prefer to use include: responding to emails and texts, fingerprint scans, and answering user-determined security questions. Among mobile banking users, 15.8% prefer fingerprint scans.
Currently, 29.8% of consumers are using passwords for their online banking, followed by PINs at 13.9%, and 12% for security questions.
A New Social And Economic Reality
In the current landscape of the pandemic, millions of businesses in a variety of industries have had to adopt a more digital strategy. This has particularly been the case for the banking industry.
As more consumers are limited from entering public buildings, they have had to shift to digital channels such as online banking. This online banking trend is likely to outlive the pandemic, as the study shows. Banks have a lot of work to do as they try to build robust systems to keep their customers’ information safe from fraud.