Data Snack: 65% of customers expect primary banks to be fully online in the next 5 years
- Only 35% of customers expect primary banks to maintain offline channels and presence in the next 5 years.
- Banking executives are drilling down on the areas they think are most important: integration and product offerings.
While the world is still reeling from the after-effects of Covid, one change that is here to stay lies in the mechanics of digital banking. Moving online proved to be a challenge for large and small banks alike, but in 2023 it seems that digital transformation is going to become an intrinsic part of banking.
A recent report by CCG Catalyst suggests that customers show higher satisfaction rates for digital-only banks in comparison to traditional banks – despite the latter having 44% more usage than digital-only banking.
Satisfaction rates show similar trends for prepaid accounts as well as standalone digital accounts, further strengthening the case for digital channels. Standalone digital accounts like Venmo or digital-only banks have transformed what customers expect when they bank by introducing seamless and convenient interfaces as part of the experience.
This shift is indicative of more than just evolving digital strategies. In fact, 65% of Americans think that in five years' time, most people’s primary bank will be entirely online. Although this may not come to pass within that timeframe, these perceptions show the willingness American consumers have towards digital and online-only channels.
Moving online for a bank is a task wrought with many challenges. More often than not, banks work with core technology providers for the development of their banking infrastructure. This means that moving online is not a decision a bank can take alone, and it must tie in with the facilities and improvements offered by their technology providers.
Moreover, from developing good customer experiences to improving internal process automation and third-party integrations, digital transformation has many facets. In 2022, banking executives were looking at areas like “better product offerings and third-party integrations” as possible sectors of interest.
Historically, working with a core banking technology provider can limit a bank's options. This issue has reared its head in the last year as more banking executives demand ease in integration with third parties of their choosing.
What does this mean for the banking landscape? It means that going forward, banks will have more options when choosing their partners. For core technology providers, this entails the development of an architecture and software ecosystem that can support integration with disparate companies and services, regardless of whether there is a partnership in place. This will allow banks to gain from competitive offerings and ensure every new product matches their needs minutely.