How Banks Are Shifting to Digital at Record Rates (and Why It Matters)
The COVID pandemic has altered more than our health habits. According to survey results from S&P Global Market Intelligence, it has dramatically changed the way we bank as well.
As we mentioned in our last blog post, 2 Big Reasons Banks Will Be Holding Excess Cash in 2022, banks are seeing more customers interact with their services digitally instead of physically. When the entire country was in lockdown for much of 2020, and later when many people simply weren’t comfortable spending much time in public places, a lot of customers began doing most (if not all) of their banking online.
They found that common activities such as deposits, transfers, and paying bills were easily done without having to go to a traditional brick-and-mortar branch. As a result, banks saw a sharp increase in activity through their websites and mobile apps.
Now that the pandemic is far less severe and local restrictions have mostly lifted, customers seem to be sticking with their new remote banking habits.
S&P Global Survey Shows That Digital Banking Beats The Branches
In February and March of 2021, S&P Global Market Intelligence conducted their annual U.S. mobile banking survey. One of the highlights from the responses they received was that over 52% of those bank customers were visiting branches less frequently than they did prior to the pandemic. During that same time period, 65% of people surveyed said they began using digital banking options like mobile apps instead.
The survey from the previous year shows a similar trend. In 2020, 58% were banking at branches less frequently than they did prior to the pandemic and 61% were using digital tools more.
How Banks Are Responding
As banks continually look for ways to trim expenses and increase profit margins, this new data about customer behavior has not escaped their attention. Many banks are closing branch locations at record rates and investing money into improving their digital technology instead.
In 2020, 3,488 bank branches were closed while only 1,074 new locations were opened. 2021 saw even more closures–3,609 had shut their doors by the end of August–which set a record greater than any period in the last 10 years!
Making digital products more attractive is a wise move for banks in 2022. Banking leaders looking to attract the types of customers this report highlights are either creating mobile apps or streamlining them to make them more user-friendly. If customers encounter an outdated, frustrating, or non-existent app for your bank, they will simply make the move to another bank. That’s revenue potential that most banks cannot afford to ignore.
How Southard Financial Can Help
For over 30 years, our financial experts have been providing a variety of Services for Financial Institutions. Whether you represent a bank or some other kind of financial institution, we have the knowledge and experience to help you with:
- Appraisals
- Transaction Advice
- Consulting
Schedule a call with us today to get the help you need adapting to the ever-changing banking world!
