In fact, many banks saw a record growth in digital banking usage and welcomed first-time users. One-third of our survey respondents agree 3 that they are using digital banking channels much more now compared to the prepandemic days. Equally important, if not more, is the imperative to humanize banking interactions, whether consumers choose to engage with their bank in-person at a branch or digitally with a chatbot while banking online.īlending high-tech and high-touch banking experiences So how should banks rethink the digital banking experience and expand their digital offerings with an eye on increasing customer loyalty? They could consider many things, from personalizing experiences to alleviating consumers’ perceived security risks. (For the survey methodology, see sidebar “About the survey.”) Our survey results also show that urban dwellers and those with full-time jobs are also likely to be more open to new banking relationships.

The net result is that stickiness with primary banks is at risk, especially among younger consumers. While mobile banking has made it convenient for consumers to check account status, pay bills, transfer money, or withdraw cash from ATMs, the new digital tools have also enabled easy access to alternative financial options from banks, digital-only competitors, and large technology companies (“bigtechs”). However, banks should capitalize on the digital banking momentum by blending digital and human experiences. In fact, branches are likely to remain pivotal to banks’ overall revenue growth and strengthening customer relationships. Some of these episodic interactions may return to the branches, especially among cohorts more comfortable with live, in-person interactions. That said, irrespective of the banking channel they use-the branch, phone, or a mobile app-one factor continues to remain important for them: the human touch. After the pandemic experience, consumers seem to be looking not only for instant gratification, increased convenience, and flexibility, but also more tailored services. They may use digital channels for many routine transactions, but for services that are complex and involved, many surveyed customers will want in-person interactions, even as their needs are evolving with changing social, economic, cultural, and technological trends. In fact, our survey findings indicate that consumers’ preferences for digital banking are very much context dependent. The answers to these questions are not as straightforward as they may seem. But will these new digital banking behaviors-some of which were involuntary-stick, and more importantly, will the increasingly digital interactions lead to sticky relationships? 1 The pandemic even pushed many customers to use mobile banking for the first time, especially in the older cohorts. For instance, Wells Fargo saw a 35% increase in remote check deposits and a 50% growth in online wire transfers compared to a year ago. With many branches temporarily shut down and most physical interactions minimized, retail bank consumers in the United States had no choice but to embrace these self-service channels like never before.Īlmost every bank, large and small, saw a spike in digital banking usage. The COVID-19 pandemic was an unprecedented catalyst for digital banking across the globe. Uncovering the new digital banking paradox Banks should capitalize on the momentum in the use of digital and self-service channels and try to elevate customer experience with an innovative blend of human and digital features.

Banks have a unique opportunity to influence customer preferences for digital channels, increase stickiness, and at the same time strengthen relationships.

Generally, they are also more open to financial products from digital-only banks and large technology companies. However, they are less satisfied with their primary banks, and they are also at a higher risk of switching. Younger consumers surveyed demonstrate a preference for both physical and digital channels.Meeting consumers’ latent need for the human touch in digital channels is a real opportunity for banks. Our survey indicates that consumers will continue to use digital channels for simple transactional activities, but many consumers desire high-touch interactions for more complex products and services, such as mortgages and financial advice.Digital banking-perhaps for the first time-may be contributing to overall satisfaction with banks, which still remains quite robust overall. The pandemic is continuing to reshape banking preferences and behaviors among US consumers.

Digital insights