Will Digital Banks Ever Overtake Consumer Alternatives?
We’re living in an increasingly digitised world, where customers are increasingly inclined to seek out products and services online. This is having a significant impact on a host of international markets, with the lucrative banking sector no exception to this rule.
An estimated four out of 10 people in the UK have transitioned to using mobile banking apps to manage their finances, for example, whilst around 55.4 million Millennials in the States aged 23 to 38 are now using digital banking on a regular basis.
However, there’s more to these figures than initially meets the eye, and it would be wrong to assume that bricks-and-mortar banks are failing. But just how popular is digital-only banking, and will it ever supersede traditional channels?
Why is Digital Banking so Popular?
Given the rising popularity of digital and mobile banking, it’s little wonder that some customers have begun to eschew traditional consumer outlets and branch visits.
By being able to manage their finances through an accessible and real-time interface, customers retain far greater control of their finances on a daily basis.
Not only this, but digital channels provide live notifications and up-to-the-minute spending updates, whilst also offering features such as instant PIN changes, superior customer support and the ability to trade cryptocurrency.
With digital and mobile banking, it’s also far easier to manage multiple current and savings accounts from a single platform, which in turn lends itself to more efficient money managing techniques.
So, are Branch Visits Becoming a Thing of the Past?
Whilst it may be true that digital banking is becoming increasingly popular (especially amongst the influential and powerful Millennial demographic), this consumer group is not currently ready to eschew branch visits entirely.
In fact, it’s estimated that less than half of Millennial respondents aged between 18 and 34 would consider transitioning to a digital-only account, as they continue to enjoy the personalised service and support provided during branch visits.
This may have something to do with the fact that Millennials are known to prioritise experiences over material wealth and savings, and this has a clear influence on the type of customer journey that they want to pursue with banks.
So, although digital providers can offer everything from a basic bank account to more advanced options with a number of real-time features, today’s customers remain largely wedded to the idea of branch visits and corporeal outlets.
Will Digital-only Banks ever Grow to Dominate the Market?
Whilst traditional consumer banks remain relevant for now, it cannot be argued that digital and mobile banking technologies have gradually changed the way in which we accumulate, save and manage our finances.
This is likely to continue in the future, as those in the Millennial demographic mature and members of the iGen group also come of age.
This evolution will undoubtedly diminish the popularity of consumer banks and branch visits, to the point where this type of institution becomes largely moribund over time.