Consumers emerging from the pandemic are navigating turbulent economic waters, with soaring inflation, rising interest rates and the disappearance of pandemic relief, making managing their financial health – and reducing of their debt – an absolute priority. This realignment has resulted in a subtle but significant shift in their relationships with their financial institutions (FIs). Customers no longer view banks solely as service providers, but increasingly as financial wellness partners who can provide personalized solutions to their complex problems face-to-face.
Consumers continue to demand that FIs provide faster, cheaper and more transparent digital payment solutions to facilitate the frictionless payment pathways they expect in their routine transactions, such as bill payment and funds transfer. . In a surprising twist, however, clients – especially those under 35 – are increasingly turning to live, in-branch and in-person advice from trusted financial advisers to help them plan their short-term financial future. and long term. Trust is a critical factor, especially among customers who bank locally, with 72% of customers in a 2019 PYMNTS survey citing “trust” as the main reason for choosing their FI partners.
This month, PYMNTS Intelligence examines how consumers are looking to combine digital and in-person FI services to manage their financial well-being. It also explores how banks can leverage these hybrid service models to offer customers a menu of personalized services as easily and quickly as possible.
Consumers seek digital services with a human touch for financial well-being
A recent study by PYMNTS shows that mobile apps have overtaken in-person branch banking as the primary way consumers interact with their banks. Forty-one percent of banking customers surveyed cited mobile apps as their most used method of interacting with their accounts, compared to just 11% primarily using in-person branches.
A recent survey of FI customers, however, strongly suggests that rumors of the disappearance of branch banking services are premature. Instead, clients are increasingly looking for FIs that can deliver a hybrid service model that highlights advice from all advisor offices that can partner with them, helping them build a roadmap. personalized to increase their wealth or repair their financial houses.
31% of consumers say they prefer going to a branch when opening a wealth management account, compared to 16% who prefer online banking and 10% who choose mobile banking for this service. Similarly, 35% prefer to visit a branch for financial advice, compared to 15% who turn to online banking and only 9% who use mobile banking. Branches are expected to remain central to banks’ overall revenue growth and serve as a vehicle to strengthen customer relationships, especially for complex financial transactions.
Adhesion is always high risk
However, other recent survey results show that customer migration to traditional bank branches is decidedly context-dependent. Unless banks adopt a hybrid customer approach that offers a comprehensive and diverse menu of low-cost digital payment tools that offer customized solutions, their customers are all set to switch to other banks that do.
Although 86% of US consumers are happy with their banks, a significant number are increasingly willing to work with new providers, including FinTech companies and other non-bank providers. More than a quarter – 28% – of other survey respondents indicated “switching to another bank” as part of their plan to improve their financial well-being. While a recent NCR survey found that 78% of Americans would rather partner with an FI than a FinTech provider to develop a personal financial management plan, FIs and other traditional institutions still face headwinds. competitive opposites from FinTechs. About a third of all consumers, including 47% of millennials, use at least one fintech company, large tech company, merchant or other non-bank provider for financial services activities.
The post-pandemic reality is that mobile is the new bank, and unless FIs forge strategic technology partnerships to quickly and easily implement new digital payment tools that offer consumers the speed, flexibility and the convenience they want, their customers won’t hesitate to walk far and find suppliers who will. Access to products and services that address unmet needs would drive a majority of consumers to switch FIs, with 70% of respondents saying they would be “likely” or “very likely” to switch.
To survive and thrive, financial institutions and credit unions must unquestionably embrace and expand their digital payment offerings to meet growing customer appetite for frictionless payment systems that span all demographics. They should remember, however, that there is also a healthy client appetite – especially among younger clients – for FIs who can combine these digital tools with personalized, personalized advice and guidance to put them on the path to well-being. be financial and Security.