Covid-19 Drives Digital Banking Uptake to a Record High

February 8, 2022

The deadly virus might come and go, but one thing remains engraved in history: The precedented Coronavirus pandemic has dramatically altered the banking industry. During the crisis, the global uptake of digital banking services took a new turn, with both the young and old flocking to online and mobile banking platforms en masse.

At the onset of the pandemic, it wasn’t clear whether or not conventional banks would be phased out by the new, convenient banking tools backed by cutting-edge fintech. But it seems American financial institutions wouldn’t let a “good” crisis go to waste. Banks opted for strategic partnerships to quench their customers’ thirst for digital banking services instead of competing with the new tech.

From reducing the number of branches to limiting business hours, the digital banking wave has fast-tracked the changing times in the banking sector.

Accelerated Adoption of Digital Banking

While digital banking had taken an upward trajectory even before the pandemic, Americans, particularly the younger ones, are now hopping on board much faster. As a result, what is being witnessed now is history’s most significant acceleration of digital banking.

While speaking to American Banker, Wells Fargo Securities analyst Mike Mayo noted that had the pandemic not come along, what happened in the last few months would have taken place between two to ten years.

Customers have been forced to adjust to digital platforms in lieu of patronizing the local banks. On top of that, the current health crisis is contributing significantly to the culture of contactless payments.

Familiarity Meets Satisfaction

One thing that remains constant in the tech space — as people continue using an innovation, they’re likely to get hooked to it.

Digital banking tools have become the go-to platforms for users looking to save time and money transacting. Initially, financial service providers believed that a primary barrier to the massive adoption of digital banking was the learning curve, more so among the older generation. However, with the rise of intuitive banking tools, people of all ages are learning to transact virtually much faster, will lesser support. And even those that need help, everything seems to be available one click away online.

Nonetheless, faster uptake of digital services should not be mistaken for loyalty by service providers. Millennials have been known to shift from one tool to the other at the mere experience of slower transactions speeds, higher fees and lesser reliability.

3 Reasons for Contactless Payment’s “Overnight” Success

Digital banking offers contactless transactions that pose several advantages amid the global Coronavirus crisis. From socially distant banking to seamless and swift payments, here’s a breakdown of the top three reasons why contactless payments are booming:

1. Being able to transact whenever or wherever you are is undoubtedly a key feature of digital banking.

Mobile banking apps, for example, allow you to deposit checks from your home, confirm balances, and withdraw cash without visiting your local branch.

2. Modern banking tools are enriched with consumer-focused functionalities.

Virtual banking platforms will offer financial advice, saving tools, loan calculators, virtual assistants, etc. Sending money in an instant might be a big deal for digital bankers; however, a host of other extra features make the virtual banking experience painless for Americans looking to avoid lengthy bank queues.

3. Gone is the era when digital banking sent cold chills down our spines for fear of the unknown.

Instead, financial players have armed their tools with top-of-range security protocols that ensure not a dime of your money lands in the wrong hands. Security features such as multi-factor authentication via mobile and online spaces are among the recent measures banks installed to further secure user accounts.

Lastly, we’d love to hear from you. Are you planning to stick to digital banking beyond the pandemic? While at it, let us also know any pros and cons you’ve noted as a digital banking fanatic.

Read next: The Next 3 Phases of Fintech Evolution

Source: unsplash.com

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