Bank branches aren’t a thing of the past yet, but that could be the way they’re headed now that consumers can deposit checks, check balances and even open accounts via computer or smartphone
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Going to the bank was once an errand that required getting up early on a Saturday or taking a long lunch. With online and mobile banking options, however, gone are the days of driving to the bank to deposit a check or even open a checking or savings account.
In 2016, 62 percent of Americans cited digital banking as their primary method of banking, up from 51 percent in 2015. Gen Xers (70 percent) and millennials (68 percent) are the most likely to primarily turn to mobile or online banking.3
|Percentage of Americans who primarily use digital banking|
Source: Bank of America
Opening new accounts
Consumers still prefer online over mobile for opening new accounts, but this may be a function of demand outstripping supply – only a third of the top 30 financial institutions support end-to-end account opening via mobile devices.2
Millennials use smart devices to open checking accounts at 1.5 times the rate of older generations (27 percent versus 19 percent). However, consumers in this generation also have thin credit files that often prevent their identities from being successfully verified as part of a digital account opening flow.2
By adopting mobile-oriented tools such as biometrics, device recognition and image capture, financial institutions can create a successful digital account opening flow for immigrants, divorcees and young consumers whose credit profiles confound existing identity verification processes.2
Additionally, the customer experience of digital account opening is sacrificed for the sake of strong fraud mitigation and regulatory compliance. Institutions report that up to half of digital applicants are being pushed offline to verify their identities or to submit additional required documentation. If they visit a branch to follow up, applicants often begin the application process again.2
Other online and mobile banking activities
With the exception of depositing a check, the types of banking activity conducted among those using their PC compared to those using their mobile phone (web or app) is very similar.
|How millennials check their bank accounts (March-May 2016)|
|Online via desktop or laptop|
|Offline (branch, ATM, call center)|
The numbers were similar for checking account transactions, accessing account details, transferring money between one’s own accounts, paying bills, transferring money to someone else and setting up automatic payments.1
The majority (54 percent) of consumers say they use a mobile banking app, up from 48 percent in 2015. More than a third (35 percent) check their banking app once a day or more, but the majority of consumers (84 percent) check it once a week or more. Forty-one percent of consumers say having constant access to their finances decreases their daily level of stress.3
Eighty-seven percent of mobile banking customers use alerts and notifications for fraud, deposits made and low balances. Nearly three-quarters (71 percent) have taken action as the result of a mobile banking alert.
Mobile and online bill pay
U.S. consumers pay approximately 14.7 billion bills annually, shelling out roughly $3.9 trillion. Of those, 2.2 billion are paid online via a financial institution’s website or mobile app.4
However, bank bill pay represents only 27 percent of all online consumer bill payments. Consumers pay almost all the rest at each individual biller’s website.4
- VocaLink Millennials U.S. mobile payments check May 2016
- Looking Beyond KBA: Solving the Fraud vs. Customer Experience Challenge in Digital Account Opening report for Mitek produced by Javelin November 2016
- Bank of America Trends in Consumer Mobility Report 2016
- Aite Group report U.S. Bank Bill Pay: An Update February 2017
- TSYS 2016 Consumer Payment Study