A new study shows that a surprising amount of Americans do not plan to visit brick-and-mortar banks after lockdown measures end. COVID-19 and its social distancing measures have introduced online banking platforms to many. 40% of Americans say they’ve made the switch for good.
Digital Banking is Here to Stay, Study Suggests
A new report from May 27, shows that only 40% of American consumers intend to return to physical banks following the lifting of lockdown restrictions. This predicted shift is due to a significant increase in online banking and non-traditional platforms which facilitate financial transactions. In general, FinTech has seen an uptick following the closing of physical business across the globe due to COVID-19.
New information from the Fidelity National Information Services (FIS) shows that new mobile banking registrations grew by 200% in April 2020. Furthermore, traffic to mobile banking apps grew by 85% the same month. This was around the time that quarantines were implemented worldwide which subsequently led to a surge in customer service requests via call centers.
According to Brandon Larson, managing director at Novantas, a financial services company, organizations are having to adjust to the increased online traffic. Following the United States’ issuance of stimulus checks to citizens, more people were conducting online transactions and checking their balances multiple times a week. This, Larson says, created even more emphasis on digital banking.
Across the United States, lockdown measures are being lifted and this is expected to have an effect on many businesses, including banks. Despite the expected traffic towards physical bank locations, the new way of mostly digital banking is expected to endure. A study conducted by Novantas shows that only 40% of Americans say they will return to physical bank locations following the end of lockdown measures.
This is credited to the convenience offered by mobile banking platforms and consumers getting used to them during this period. As such, most will feel no need to go back to their previous habits of visiting physical banks. Maria Schuld, division executive at FIS’s North America banking services group, has stated that even more people will opt for mobile banking in the near future.
How COVID-19 has Changed the Banking System
The ongoing pandemic has affected many facets of life, and has brought about major changes to the banking sector. Banks have reported an increase in online account openings and overall use.
Jamie Warder, head of digital banking at KeyBank, states that the shift to digital banking had already been taking place but the pandemic only served to speed up this transition. This includes customers who do not wish to leave their homes to use ATMs learning how to navigate mobile banking as a necessity.
Banks themselves have also begun digitizing many processes that were formerly analog. The need for certain remote resources has also been brought to light by the current situation. This is also coupled with the increase in fintech solutions since the pandemic began.
As banks and other major financial institutions across the globe prepare to re-open, it is clear that things won’t be business as usual. Protective measures are being taken by places such as the New York Stock Exchange who plan to implement social distancing. This includes some workers continuing to work remotely and daily disinfecting of the premises.
Even at the legislative end, changes are being proposed to cope with the impact of re-opening the economy. A bill titled “Touchless Transactions Act of 2020” is being developed by the US House Financial Services Committee and more specifically, Congressman French Hill. The bill, if successful, will ensure that no physical contact will be needed for the use of point-of-sale (POS) transactions and will be yet another step in creating a contactless, cashless world.
Do you intend to return to physical banks once restrictions are lifted? Do you think we are heading towards a fully contactless — and eventually cashless — world? Let us know your thoughts below.