Do you remember rushing to the bank on Friday to make sure you had enough cash for the weekend? When was the last time you filled out a deposit slip or waited weeks to replace a lost credit card or shopped in a store that doesn’t take credit cards?
Today, your wallet is probably filled with contactless credit and debit cards. You might even pay with your mobile phone or have a card that allows you to pay in cryptocurrency.
We’re in the midst of the Great Payments Disruption, and payment and money management options are more varied than ever. And both customers and financial institutions are struggling to keep up.
So, to better understand where end users stand, Entrust surveyed 1,350 consumers from nine countries. The survey polled consumers who have made or received digital payments in the past 12 months to uncover their preferences and habits during this disruption of the payments landscape.
Results show that consumers want the flexibility and security of the new digital-first world to also extend to their banking. That means financial institutions need to rise to the challenge with their digital offerings to maintain a competitive edge.
3 key payments-related themes from our data
Consumers identified their expectations and concerns for their banks, revealing considerations financial institutions must keep in mind as they adapt to the Great Payments Disruption. Here are three key findings from The Great Payments Disruption report:
1. Digital banking offerings are not a nice-to-have — they’re a necessity.
There’s no denying that digital offerings entice consumers. In fact, 88% of respondents said they prefer to do their banking online. Let’s break down what “online” means. When it comes to online banking options, mobile apps reign supreme: 59% of respondents prefer to use their bank’s mobile phone or tablet app. On the other hand, 29% prefer to bank online on their desktop web browser.
But while consumers prefer the convenience of online banking options, they’re still physically interacting with their banks — 70% said they’ve used an interactive teller machine (ITM) in the past year. Seamless omnichannel touchpoints remain critical to customer experience. And if a bank isn’t providing a digital-first experience, they risk falling behind.
2. Digital transformation unlocks flexibility, and customers are craving secure and flexible options.
When choosing a bank or considering whether to change banks, respondents’ top priorities can be distilled down to more flexible payment options, better access to digital solutions and increased security. But as banking and credit become more digital, 90% of respondents said they were concerned about the potential for banking or credit fraud. Two-thirds of respondents who were notified of fraud (67%) said they changed their bank or credit union as a result. Clearly, consumers want high quality, secure digital banking — and they’re willing to switch banks for it.
These results highlight significant opportunities for challenger banks. In fact, 72% of global respondents said they would consider using a branchless online banking service/challenger bank for their banking. To maintain their competitive edge, banks and credit unions need to invest in digital and security solutions to keep competitors and challenger banks from capturing their market share.
3. Contactless payment methods continue to rise in popularity.
Compared to countries like the U.K. whose cardholders adopted contactless cards more than ten years ago, contactless cards in the U.S. only recently emerged on a wide scale. While newer to the U.S., contactless cards are quickly picking up steam and meeting consumer demand for more flexible and secure options. In fact, 48% of respondents listed contactless credit or debit cards as their preferred payment method, only slightly behind the 50% of consumers who said they preferred credit or debit cards with chips. Peer-to-peer payment apps (e.g., PayPal or Venmo) and contactless mobile pay — while continuing to grow in popularity — trailed behind with only 30% of respondents listing them as their preferred payment methods.
However, this lack of contactless mobile pay adoption could be due to only 53% of respondents saying they’ve received a digitally issued debit or credit card from their bank or credit union. While this is a slight majority, there is room for growth — and for banks, a large opportunity presents itself here. Considering that respondents said they want more flexible options, a digital card solution could be the answer banks need to draw in a larger customer base and build loyalty from existing clients to remain relevant.
Download The Great Payments Disruption report for more insights
Download The Great Payments Disruption report for a deeper understanding of the current digital disruption in the payments industry and the ensuing consumer impacts. In the report, you’ll learn what consumers expect from their banks and how you can provide a secure, digital-first omnichannel customer experience.
If you’re interested in learning more about how we can help you embrace the future of banking, get in touch with our team today.