Entrust has released the results of a new survey that tracks the shifting preferences of banking consumers in a digital age. The Great Payments Disruption survey is based on the feedback of 1,350 consumers who are using digital payment services in the US, the UK, the UAE, Canada, Germany, Saudi Arabia, Singapore, Australia, and Indonesia.
The findings show that financial institutions will need to support digital banking options to attract and retain customers. The vast majority (88 percent) expressed a preference for online banking, with 59 percent favoring a first party app and 29 percent opting to bank through a web browser on a desktop.
By the same token, the banks that can offer a range of payment options at an affordable rate should have an advantage against their competition. Low and flexible fee structures are one of the biggest priorities for consumers when choosing a bank. That creates an opportunity for challenger banks, which can disrupt the market with appealing features like overdraft protection without any kind of fee.
On that front, Entrust noted that many financial institutions may no longer need to maintain a physical branch, with 86 percent of the US public indicating that they would be willing to consider a fully digital banking service. However, banks that want to capture the entire market will still need physical premises for the time being to attract the eight percent of customers who prefer to do their banking at a branch location, or the three percent who prefer to use an ATM.
The rise of digital banking cards is likely to be another key point of disruption. Just over half (53 percent) of the respondents have already been issued a debit or credit card digitally, and a full two-thirds would rather open an account online. That trend is only accelerating with younger generations (Millennials and Gen Z), which means that contactless and digital payment cards could become an appealing sales pitch for future banking customers.
Having said that, banks will need to be able to guarantee that they can keep people’s payment information safe. Ninety percent of the respondents are worried about fraud in a digital environment, and many will switch banks if their trust is violated. Forty-two percent were notified about a fraud charge in the past year, and that prompted 67 percent of those individuals to move to a new financial institution. Entrust suggested that strong security options like biometric authentication could help alleviate some of those fears.