Online banking got a significant boost during the coronavirus (COVID-19) pandemic because nearly all banks closed their lobbies. But a new study of digital banking suggests that only accelerated a trend that had already been taking hold.
A consumer digital banking study by FICO, an analytics firm, found that U.S. and Canadian consumers have embraced a wide range of digital banking features. More of them are opening accounts online instead of going to a nearby branch. They are also increasingly open to biometric identity procedures such as fingerprints and face scans.
"In an effort to help stop the spread of the virus, consumers across North America have accelerated their move from brick-and-mortar branches to digital banking channels," said Liz Lasher, vice president, FICO. "As a result, consumers' expectations have shifted, placing higher priority on having a seamless and engaging digital experience, which includes establishing account security.”
For financial service providers, Lasher says the message is clear. Providers will have to have a solid digital platform to not only deliver good customer service but also improve fraud protection and financial crime compliance.
The study found that consumer expectations have risen along with the shift to online banking. The authors say bank customers expect a seamless, uninterrupted experience when opening accounts digitally when using a website or a mobile app.
They also don't want to be forced to use another channel to complete tasks, particularly those associated with proving their identity. The survey of consumers found that 25% of Americans will go to a competitor or abandon the application completely if they are asked to mail documents, visit branches, or send scanned documents by email
Banks are also finding themselves in increased competition with fintech firms that provide many of the same financial services but are completely digital. A recent report by Research and Markets found that fintech firms have a significant head start over traditional banks and are now employing artificial intelligence (AI) and blockchain to improve the customer experience.
“AI interfaces and chatbots have primarily redefined customer service, and its expanding business will enable AI-oriented fintech market to grow at an impressive rate through 2025,” the authors predicted.