Why Today's Top Priority for Banks Makes Perfect Sense

As we covered in a prior post, leading digital-only banks saw a major boost throughout 2020, with the number of young adults who call Chime their primary bank ballooning by 300% in a single year. 

It's a trend that started before well 2020, and it's a trend that's not limited to basic bank services. To illustrate, the share of personal loans that have gone to fintech companies has been climbing from 2013 to 2018 (the latest data currently available).

In addition, the average personal loan size at a fintech is nearly as large as those offered by banks, with TransUnion pinning the average amount from a fintech at $10,338 and the average amount from a bank at $13,514.

Takentogether, it’s no wonder that bank executives are focused above all on improving the digital experience, according to the Digital Banking Report.

The pandemic has only heightened the need for this priority, with consumers overwhelmingly saying that they plan to go into a bank branch less often and use mobile banking more often than they did in 2019.

This is why banks are right to make the digital experience the top priority of 2021: They know that the competition from nontraditional players is heating up thanks to consumer demand. What they're finding — and what we're finding as well — is that people value convenience. Yes, they want safety (particularly when it comes to their money). But once they know they have that, they want to be able to quickly access their money. They want a simple, seamless money experience.

By offering such an experience for their customers, banks can thrive through the digital transformation — a transformation that has only accelerated as time goes on.