In a time that has led many Americans to reassess their
spending and saving habits, retail banking has gone through considerable change
to meet the evolving needs of the COVID-19 pandemic. Although many banking
customers have increasingly opted for mobile banking services, others have
continued to visit their local branches to deposit money, open accounts, and
meet other banking needs.
Using Pollfish, we surveyed 1,800 American adults to
discover how their banking habits have changed during the pandemic, what
services they prefer and expect from their primary bank, and how newer
concepts, like cryptocurrencies and automation, have shifted their perceptions
on personal finance.
Mobile Banking Is on the Rise, But In-Person Banking Is
Still a Benefit
As most retail bank locations temporarily closed or altered
their normal operations at the start of the pandemic, banking customers were forced
in large part to conduct their banking activities remotely — if they were not
already doing so. Now that normal operations have mostly resumed, more than
half of our respondents said they’ve visited a bank in person in 2021, yet one
in 10 stated they had not been inside a bank in years.
While the promotion of mobile banking began well before the
pandemic, coronavirus closures led many banks to reevaluate how many retail
locations they needed to maintain. A study by S&P Global found that 3,324
bank branches in the U.S. shuttered in 2020 due to the significant shift in
bank traffic.
Among our respondents who had not visited a bank branch in
the past year, most said they could conduct their banking online, indicating a
successful trend in the adoption of mobile banking. This shift is holding
steady — another recent report from S&P Global showed that 88% of those who
used mobile banking during COVID are likely to continue their habits.
Which of the following was the main reason for your last
in-person visit to your bank?
While many banks provide mobile options, most of our
respondents visited a bank to make deposits, demonstrating a continued interest
in in-person services. S&P Global found that even though branch closures
skyrocketed in 2020, more than 1,000 branches were opened, which may reflect a
greater need or interest in in-person services in various areas of the country.
A late 2019 Adobe Analytics study found that prior to COVID,
72% of those in Gen Z visited a physical bank once a month or more, citing
similar reasons for their visits. Even now, as banking habits have shifted, 57%
of the same age group in our study said they’d visited a bank this year, as did
60% of millennials.
Which of the following retail bank benefits is most
important to you?
When respondents were asked about the banking benefits that
were most valuable to them, 26% said they still looked for the ability to visit
a physical branch, making it the top benefit overall. This mirrors earlier
findings from the 2019 Adobe study, where all age groups stated that physical
branches were a valuable perk.
Looking at the benefits by age group in our survey, those
ages 35–44 were most interested in special promotions for mortgages, aligning
with the current real estate frenzy, while those ages 18–24 were looking for
special promotions on credit cards.
Customer Habits & Perceptions Evolve Amid Digital Transformation
Technology has radically changed the experience of banking,
and in the age of COVID-19, options like contactless credit cards and mobile
payment apps have become more popular than ever. Toward the beginning of the
pandemic, the need for social distancing certainly contributed to consumer
preferences, though as time went on, contactless options remained popular, and
other concepts, like cryptocurrencies, took off.
Have you used in-person contactless credit cards so far this
year?
How often have you used mobile payment apps so far this
year?
In a survey we conducted prior to the 2020 holiday season,
47% said they’d be more likely to shop in-store with retailers who provided
contactless pay options. Now, 75% of respondents have used in-person
contactless credit cards so far this year, showing that consumers continue to
appreciate the ability to go contactless.
A whopping 83% also said they’ve used mobile payment apps in
the past 12 months. In our September 2020 survey on mobile payment app use
during the pandemic, a smaller group — 53% — said they’d used a payment app at
least once in the past year, indicating tremendous growth and sustained
interest in services like Apple Pay, Google Pay, Venmo, and more.
If your bank offered complimentary personal finance support
video calls with bankers, would this interest you?
Just as medical appointments moved overwhelmingly online to
telehealth appointments during the pandemic, some banking customers also
received virtual financial advice. Thirty-nine percent said they’d like to
receive virtual personal finance support calls if they were available, while
27% said they’ve already tried a service like this at least once.
To ensure that customers feel secure using these virtual
services, many banks have instituted procedures like checking photo IDs and using
facial recognition software.
In which of the following banking situations would you feel
comfortable interacting with a robot or automated system over a human?*
Beyond receiving video calls from their personal bankers,
our respondents also appeared to be comfortable with completing banking tasks
with the aid of artificial intelligence (AI).
While most indicated they would be okay with using an
automated system to transfer money or withdraw funds, a quarter of respondents
said they’d even be open to receiving AI-delivered financial advice based on
their personal banking habits. This interest in automation aligns closely with
our survey findings on the future of work, in which 78% said they believed they
could be even more effective in their jobs if they used automation
technologies.
Would you consider replacing your primary bank account with
cryptocurrency investments?
Cryptocurrencies have made waves over the past year, and
many of our surveyed respondents are incorporating these investments into their
portfolios. Nearly half reported they would consider replacing their primary
bank account with cryptocurrency investments — or were already doing so. A May
report from The Ascent found that more than 50 million Americans are likely to
purchase cryptocurrencies in the next year, indicating that the rise of crypto
is set to continue.
Interest in cryptocurrencies does appear somewhat split
among age groups. Just 26% of those ages 54+ would consider (or have already
started) replacing their primary accounts with crypto, whereas 63% in the 25–34
age group stated the same.
Saving & Spending Habits Shifted During COVID-19
As we entered an economic crisis during the pandemic,
Americans everywhere reconsidered how they were spending — and saving — their
funds. Fifty-four percent said they’ve become more serious about their savings
goals due to the pandemic, perhaps reflecting job insecurity or reduced
expenditures during stay-at-home periods. The trend has been well recognized,
as the U.S. Bureau of Economic Analysis found that the U.S. personal saving
rate, which reflects a ratio of personal savings to disposable income, was at a
record 32% this past April.
How has the pandemic impacted your approach to saving money?
Have you moved any funds from your primary bank’s savings
account into a new, external savings account since the start of the pandemic?*
As they reconsidered their approach to saving, many banking
customers looked for the best way to allocate their funds. While a third opted
for a high-yield savings account, a quarter of respondents moved their funds
into a cryptocurrency wallet, further proving the broader acceptance of Bitcoin
and other digital currencies.
Which of the following have you spent more on during the
pandemic?
When it came to how our respondents spent their money during
COVID, a perhaps unsurprising 53% said they spent more on Amazon purchases than
anything else. Fourteen percent said they allocated more funds to food delivery
apps, which mirrors findings from our 2020 fintech survey report, where we
found that 21% were new users of apps like UberEats and DoorDash because of the
pandemic.
Long hours spent at home also led to 10% of respondents
spending more on TV subscription services. In our analysis of TV streaming
habits in early 2021, we found that 72% had subscribed to a new streaming
service in the past year.
Security Is a Chief Concern for Banking Customers in the
Digital Age
Amid the rise of digital and mobile banking, many retail
banks have suffered from data breaches in the past several months. Most of our
respondents are concerned about the threat of a data breach and would consider
switching banks if a cybersecurity event occurred. The same thinking applies to
those using mobile payment apps, as 69% report they would consider switching
services in the event of a breach.
Which of the following data security practices do you follow
regarding your mobile payment and mobile banking transactions?*
To protect their mobile payment and banking transactions,
nearly all our surveyed respondents said they utilize at least one security
feature, such as password protection, activity alerts, and two-factor
authentication. Five percent stated they did not follow any of the suggested
security practices, indicating there is still room for improvement — and for
consumers to remain vigilant.
How Will Retail Banking Habits Continue to Adapt?
While more than half of respondents aren’t looking to switch
banks right now, 47% are looking to switch financial institutions — and 22% of
that group are looking for a local community bank.
Larger retail banks may have more robust mobile banking
options, though community banks’ account fees are often lower than those
associated with retail banks, which, when coupled with more personalized
service, could be more appealing to customers.
The Post-COVID Future of Retail Banking
Now that we’ve reached the vaccination phase of the
pandemic, consumers will likely continue to adapt their banking habits to suit
their preferences and needs. For many, this will mean banking online, but with
more than half of our respondents reporting that they’ve visited a physical
bank branch in the past six months, in-person banking may also be set to bounce
back.
Methodology
Using Pollfish, we surveyed 1,800 American adults in late
May 2021. The results represent post-stratified data, which adds survey
weighting to age and gender demographics relevant to the census data from
polled regions.
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