Digital Habits Driving Banking Shifts, Maybe Away From Traditional Finservs

As digital engagement importance grows, so has consumer comfort with non-financial companies to conduct banking activities. That is a scary finding for traditional financial institutions in Fiserv’s latest consumer trends research.

Brookfield. Wis.-based Fiserv’s new quarterly Expectations & Experiences study, in which the Harris Poll surveyed 3,050 consumers, found consumers remaining most comfortable with traditional financial organizations. However, a growing number said say they would use a tech company such as Apple or Google to pay bills, take out a loan and conduct other financial activities.

The survey found adoption of online banking has fully matured and mobile banking is on the same path. Most consumers (90%) have accessed online banking, and active users (those using the service in the past month) report logging on to their financial institution’s site an average of nine times per month. Slightly fewer consumers (70%) accessed mobile banking, but those who do log on more frequently – an average of 11 times per month.

The activity digital banking users perform most often is checking balances (79%, online users, 80%, mobile users). Next is bill payment, with 44% of online users and 36% of mobile users paying a bill through their financial institution’s site. Millennials are more likely to have logged on to their primary financial institution’s site using a mobile device compared to their older peers (92% versus 62%). Thirty percent of mobile banking users used the service to deposit a check.

Nevertheless, access to a traditional branch remains relevant, with 52% of consumers reporting they visited a brick-and-mortar location within the past month and 80% in the past six months. Deposits and withdrawals remain the main reason for branch visits.

“The world is being shaped by digital connections and convenience, providing an opportunity for financial institutions to incorporate relevant new technologies and enable customers to manage their financial lives with ease any way they choose to engage,” Dan Bjerke, senior vice president, Digital Banking, Fiserv, said. “From the moment they pick up their phone or walk into a branch, consumers expect intuitive, seamless banking experiences and a high level of confidence in security across every channel.”

While use of traditional financial institutions for bill payments, loans, money management and other financial services remains steady, consumer comfort with different types of companies, particularly technology companies, has grown. For instance, 55% of people would be comfortable using a technology company such as Apple or Google to pay bills, compared to 40% of consumers who said the same in 2017. Compared to the previous year, there were gains in comfort with using a hypothetical technology company for other activities, including: taking out a loan (39%, up 10%), tracking a budget (54%, up 13%), and transferring money to others (52%, up 14%).

Fiserv suggested the quest for convenience and openness to nonfinancial companies may be creating new considerations for consumers and financial institutions across channels including:

• At the branch. Nearly half of people (49%) would feel secure using biometrics for authentication. Yet, the appeal of fully automated branches offering the same services as traditional branches is modest. Only 32% of consumers said they would likely stay with their primary financial institution if it went teller-free, compared to 24% of consumers who would not be likely to stay.
• Via voice-activation. Among millennials, 31% perceive voice banking as faster than mobile banking, and 32% cited the ability to free up their hands to perform other tasks as a benefit of voice banking. Factors that may prevent voice banking adoption include preference for speaking to a human (42%), concern over eavesdropping (36%) and a perception that it is less secure (35%).