The Covid-19 pandemic has driven more consumers to online and mobile banking as banks have to meet rising customer expectations and bridge online and in-person options, the America Bankers Association (ABA) and Accenture have said.
The report on the state of digital lending found that baby boomers have increased online usage, with 68% skipping human interaction to decide about banking products, compared to 55% before the pandemic.
According to the report, changes in digital habits are expected to be permanent as 85% of respondents to a KeyBank 2020 financial resilience survey said they were likely to continue conducting some or all of their financial transactions digitally.
Rob Nichols, ABA president and CEO said: “The rapid convergence of banking and technology was already well upon us pre-Covid, but the pandemic has really accelerated the digitization of banking.
“Through this report and other initiatives from ABA’s innovation team, we remain committed to helping banks navigate their technology challenges and providing them with the tools they need to continue enhancing the customer experience.”
The report also provided information for banking institutions looking to accelerate their digital transformation, including considerations for selecting third-party technology vendors. It explained some regulatory concerns about digital lending, like imprecise electronic signature rules and risks of artificial intelligence.
Despite over 73% of customers adopting digital channels, the transition has been challenging for some financial institutions. A quarter of financial services customers switched their provider in 2020, with dissatisfaction as the top reason.
Daniel Brousseau, senior director, solution principal at Medallia said there are three ways for banks leaders to compete on digital experience, including simplifying buying journeys, prioritizing experience fixes that save time and money, and humanizing the digital experience while digitizing the human experience.