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Digital Banking and the Customer of Today

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Are your digital strategies aligned with customer preferences? On a recent webinar, BAI shared the findings from the latest BAI Banking Outlook research.

Below are some notable highlights.

BAI Banking Outlook: Understanding the Digital Experience Customers Want, Now More Than Ever. 83% of financial services organizations feel an increased sense of urgency to implement digital initiatives in fear of falling behind. That urgency has only increased with COVID-19 as more customers learn how to bank differently and leverage digital channels. BAI offers insights into the current digital banking landscape to help you make decisions quickly and confidently, especially during these unprecedented times. Overview and Insights. The State of Today’s Consumer. While today’s consumer feels their primary financial services organization understands their digital experience, they want more, such as 24/7 customer service, a better online account opening process, and their speed and security concerns addressed. However, most organizations are on track. The majority of consumers agree that my bank understands the digital customer experience, regardless of which type of organization is their primary. 81% Direct Bank Customers 71% Large Bank Customers 71% Regional Bank Customers 57% Community/Credit Union Customers
The State of Today’s Financial Services Organizations. Most larger financial services organizations have taken significant steps forward in digital banking, such as implementing a digital onboarding process and conducting customer journey mapping. Financial services organizations with less than $5B in assets, however, are lagging. Nearly all financial services organizations are increasing their digital investments in the next year. 13% Average digital investment across all financial services organizations. 44% Percentage of financial services organizations planning on a greater than 10% digital increase. 4% Only 4% of organizations plan no increases; and most of those are smaller institutions, with less than $5B in assets. But both financial services leaders and customers agree on the top digital experience priorities. Consumer Priorities Banker Priorities 1. Enhancing current digital banking services 2. Maintaining current digital banking services Connecting digital products across the organization 3. Building new digital banking services Maintaining current digital banking services 4. Connecting digital products across the organization Building new digital banking services
The Younger Consumer. Satisfying today’s younger generation is key for digital banking growth. Younger customers are more likely to switch their banks for better digital services—but they are also most loyal if the financial services organization meets their needs. I would switch for better digital. I would use one financial services organization if they have everything I need. Gen Z 61% 76% Millennials 62% 69% Gen X 48% 65% Boomers+ 281% 60% But friends and family recommendations are important for younger digital customers, too. Friends and family recommendations are very important to me. Established brands are very important to me when making purchase decisions. Gen Z 78% 69% Millennials 72% 78% Gen X 52% 72% Boomers+ 41% 67% As might be expected, younger consumers are more comfortable digitally. The percentage of Gen X and Millennials who have opened a deposit account online are much higher than older consumers. 45% Gen Z 43% Millennials 27% Gen X 15% Boomers Obstacles: For more complex transactions, customers prefer face-to-face banking. There are many reasons why, but fraud and security concerns are at the very top of the list.
What is your biggest frustration with digital banking? 38% Fraud and security 18% Technology problems (speed, experience, changes) 17% Account opening process 11% Personalization and recommendations 9% Confusion (products and digital capabilities) 7% Account aggregation (not being able to see all accounts in one place) Security concerns will need to be addressed in order to increase online account opening. 86% Consumers who are more careful sharing personal information over the last two years. 60% Consumers who would feel more secure if their primary provider used fingerprints, retina scans, or speech to identify them. 53% Consumers who are fine with their primary provider using AI to improve their digital experience. Looking Ahead. Although it varies by generation, every segment is looking for their financial services organization to meet their growing digital needs, but with an eye on security and convenience. Those that rise to the occasion, are poised to succeed. Yes, I would switch my primary account for a better digital experience. 2019 2020 Gen Z 54% 61% Millennials 47% 62% Gen X 46% 48% Boomer+ 18% 28%

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