While the Shift to Digital is Accelerating, the Right Mix of Human Interaction and Technology Remains Critical
The COVID-19 pandemic is changing how consumers and businesses interact with financial institutions and new research shows that this trend will likely be permanent.
According to the results of Citizens Bank’s inaugural Banking Experience Survey, half (50%) of consumers and more than three-fourths (76%) of businesses said that the COVID-19 pandemic has changed the way they interact with their financial institution. Of these respondents, 66% of consumers and 73% of businesses feel that these changes will be permanent.
The nationwide survey of 1,091 consumers and 252 business leaders also found that while the pandemic is leading to an accelerated adoption of digital banking tools, human interaction – provided either in person or via virtual channels – is essential when it comes to getting financial advice and for executing more complex transactions.
“The COVID-19 pandemic has accelerated and solidified a transition in how customers behave and interact with brands that was already well underway, posing significant questions around how companies can best serve customers going forward,” said Beth Johnson, Chief Experience Officer at Citizens Bank. “Despite the shift to digital banking, it’s clear that personal interaction remains important to customers so financial institutions must find ways to serve them seamlessly in their channel of choice.”
The Banking Tech Revolution Won’t Replace Need For Human Expertise
While 69% of consumers already prefer banking online some or all of the time and 64% agree that technology will completely change banking as they know it, a similar number (65%) agree that they prefer human expertise when receiving financial advice.
That’s particularly true at the higher end of the market, as customers with investable assets of more than $2 million are significantly more likely than others to strongly agree that they need to be able to speak to an in-person representative in order to trust a business/organization.
Similarly, 71% of business leaders perform at least some banking activities online and 85% agree that technology will completely change banking as they know it. Still, 74% see the need to at least occasionally use in-person banking and 73% prefer having in-person interactions with experts when receiving financial advice.
Business leaders who do all of their banking in person cited safety/security, accuracy/accountability and personal service as the top reasons why they preferred to do so.
Data-Driven Personalization and Advice Are Key, But Customers Want Control
The survey suggested that consumers may want it both ways when it comes to personalization. They want tailored offerings, but have some hesitations with sharing or disclosing certain types of information. Sixty percent of consumers surveyed are comfortable sharing personal information with their bank so it can provide personalized solutions and better experiences, and 49% believe that banks will use AI and big data to anticipate financial needs. However, 41% are uncomfortable with their bank using data that they previously shared with third-party sources.
The survey also uncovered a generational divide among consumers when it comes to privacy as those aged 18-24 (42%) are less likely to be comfortable with sharing personal information with their bank versus those who are 25-34 (59%), 35-44 (65%), 45-54 (59%), or 55-74 (61%).
Businesses know – and perhaps even expect – that their information will be shared by banks and third parties, and generally don’t mind if this is done to inform customized solutions and a better banking experience with 73% of respondents saying their bank should be recommending specific products/solutions based on the information they have about their business.
Businesses are Looking for Long-term Banking Partners
Business leaders were asked to name the capabilities that they found important in evaluating a banking partner. The most important factor – cited by 90% of respondents as being either somewhat or very important – was the ability of a bank to support their business throughout its lifecycle.
Of course, the quality of banking services is key. Eighty-four percent of business leaders say it is important to work with a banker who can serve as a trusted advisor and 85% expressed a desire to work with a bank that can provide more than just loans.
When asked what solutions they expect their bank to provide in the future, the three most popular choices from business leaders were: virtual assistants to help manage company finances (60%), secure mobile-optimized treasury management platforms (54%), and secure online treasury management platforms (52%).
Added Johnson: “Rapid digitization is reshaping how both consumers and businesses can interact with their banks by adding new channels that make banking more convenient, mobile and secure. It is important for banks to take advantage of new technology and create great experiences across those new channels so customers can get the best of both worlds – human interaction and digital convenience.”
Methodology
The Banking Experience survey was conducted by Mintel/Comperemedia (www.mintel.com) among 1,091 consumers and 252 business leaders, between June 2 and June 17, 2020 for the consumer survey and June 2 and June 15, 2020 for the business survey, using an email invitation and an online survey.
Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. For the interviews conducted in the consumer survey, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3.1 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample. For the business leader survey, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 6.2 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
