Passing the Point of No Return for Digital Banking


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Finopotamus aims to highlight white papers, surveys and reports that provide a glimpse as to what is taking place at and/or impacting credit unions and other organizations in the financial services industry.


By Roy Urrico


Consumer demands stay high, broken digital journeys decreasing, members stay loyal and digital offerings attract new members are revelations covered by a survey from Lightico, which sought to determine how COVID-19 impacted consumer relationships, views and expectations of the banking industry.


“Credit Union Trends,” from New York City-based Lightico, which provides advanced digital customer interactions, surveyed 1,000 consumers on April 14, 2021 and showcased the trend of consumer demand for more robust and easier digital and remote solutions.


One of the lingering changes brought on by social distancing and pandemic responses is consumers went from living lives boosted by digital interactions to making digital the major focus of the experience.

Jake Levant, Lightico

The same goes for credit unions. "The fact is we’ve passed the point of no-return for digital banking,” Jake Levant, vice president at Lightico, said. “Yes, we’ll start returning to the branch but we’ve gotten used to the fact that we can do so much on our phone from the comfort (and safety) of our couch. Yes, credit unions need face-to-face options, but the data shows that requiring a face-to-face interaction to take out a loan or open an account can mean a loss of up to 52% lost business."


Levant also noted, "The key to bringing in new members is meeting them where they are – which today is a desire for a strong and digital member experience. Credit unions have a huge opportunity to compete with even the largest banks by continuing to provide the community feel but investing smartly in turn-key, customer-facing digital tools that allow for a complete digital journey."


Here is a summary of some key survey takeaways:


· Digital adoption and comfort remain high with more than 80% of respondents inclined now to try a new digital app or website than before the pandemic.

· Physical bank visits are still common but on the decline. Forty percent have visited a bank/credit union drive-thru and 26% have gone inside a branch three or more times in the last year. Nevertheless, two-thirds are less likely to visit their financial institution’s branch or avoid it all together.

· If it required a trip to a physical branch or office, a third would be less likely to take out a loan; and half would be less likely to open a new account.

· As far as what interactions should be in-branch? The general response settled on complex or high-value interactions such as applying for a business loan (48%), a new auto or mortgage loan (42%) or receiving financial planning advice (34%).

· Consumers now demand digital banking. Two-thirds of respondents expect their financial institution to serve them digitally. Digital offerings are the top reason for choosing a new financial institution (32%), just edging out lower fees (31%).

· Broken journeys less prevalent. When asked, “Have you been directed to a physical branch during an online banking interaction in the past 6 months?” the number of respondents dropped from 57% in September 2020 to 24% in April 2021.

· Opportunities for growth: Customers at digital banks are more likely to switch their financial institution than credit union members.

· Digital experience impacts loyalty. Low digital score correlates with greater desire to change financial institution. Consumers who experienced broken journeys are four times as likely to change their financial institution in the coming months.

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