What consumer banking trends can be expected in 2021?
COVID undoubtedly impacted and reshaped consumer banking behavior in 2020. As bank lobbies across the country closed to the public, full-service drive-thru and mobile banking apps swiftly replaced traditional lobby banking. Even well post-lockdown, many branches remain accessible by appointment only for face-to-face meetings with a bank representative. Physical bank locations are no longer the go-to transactional centers many frequented pre-pandemic.
Consumer banking is an entirely different experience than it was less than a year ago. The question has been raised by many: if COVID disappeared overnight, would these new habits become permanent or would old patterns of behavior return?
As new technology is accepted—and the conveniences it brings—consumers typically do not backtrack.
A Continuous Role in Digital Progress
The banking industry has always been a forerunner of introducing technology to the general public and had a monumental role in the early digital transformation of consumers. From the first ATMs to today’s agile mobile banking apps, banking tech’s aim has always been user-friendliness and accessibility.
The effects of pandemic restrictions only further accelerated digital progress across all industries, even those historically reluctant to change. On the individual level, 14% of web-using adults in the US banked online for the very first time as a result of COVID-19 restrictions.
No doubt coronavirus is refueling the digital banking movement, and the number of full-service bank branches was already dropping before the pandemic hit. In 2019, full-service branch offices across the were down 12% from 2010, reported by Quartz from FDIC estimates. Since 2015, more than half of the US’s largest banks reduced locations by 50% (Forbes report from McKinsey & Company data).
However, many experts warn against pivoting to digital-only and instead suggest envisioning branches as financial advisory centers focused on providing guidance, products, and services personalized for customers.
Challenges Ahead: Balancing Branch and Digital Delivery
What banking trends can be anticipated in 2021, based on the lessons learned in the past year? Moving forward, customer bank access will be a hybrid experience. Physical branch locations may begin to refocus on financial planning and well-being, whereas digital platforms will handle day-to-day transactional banking.
Increased Need for Network Security
Banking institutions experienced an increased need for support to handle the influx of traffic and cyberattacks on networks. Where are the leading banks focusing their digital efforts moving into 2021? Cybersecurity— with widespread concerns about data breaches, many banks are investing heavily in fortifying network security.
Digital onboarding is a highly effective method of gaining new customers, and banks must ensure that data doesn’t end up in the wrong hands. According to RSA Security, nearly half of fraud-affected accounts are less than 24 hours old. Financial institutions will achieve this through new storage strategies, enhanced cybersecurity capabilities, and a reimagined way to deliver banking services.
Increased Need for Physical Safeguards
Physical banking has not disappeared by any means, as such safeguards are still needed for patrons and staff. Temperature-check kiosks and hand-sanitizer stations are accessible basic safeguards benefitting those in shared spaces.
Tech for Physical Locations
This has been the year of the drive-thru, even for banks. So what will physical banking look like going forward? Banks will focus on the customer experience.
Physical banking will become a choreographed, personalized experience focused on relationship building. No longer aimed at transactions, physical banking will become an interactive advisory experience, offering both self-service kiosks and informative digital displays. Banks will be more of an experiential destination complete with memorable technology, sights, and unique experiences.
Ready for the Challenge
It is true that in the past, customers valued branch banking because banks made customers use them. COVID forced financial institutions, and other traditional business models, to tap further into tech as a solution to forced closures. However, the end result has been a more convenient and user-controlled way of doing business.
