Reimagining Digital Banking for the Post-Pandemic World

Findings from Digital Banking Behaviors 2021, a nationally representative study of more than 2,000 Americans, reveal that while consumers are coping with new financial-related stress fueled by the COVID-19 pandemic — they are as a whole cautiously optimistic about their futures. Americans seem to be hedging their bets, however: There is a marked emphasis on savings and reducing expenses.

Consumers are additionally reliant on digital banking tools (such as a mobile application, online banking platform or another digital online tool) to plan, save and manage their finances through unprecedented times — 67% of consumers list their banking app as their most trusted financial tool. The study discovered that consumers ultimately expect banks to meet all of their financial needs, whether via digital banking tools or in-person banking. 

Americans: Optimistic, but Demanding a Comprehensive Approach

Digital banking gained significant momentum during the pandemic — half of consumers reported they prefer to leverage only digital banking tools to manage their finances. The other half, however, are looking to their local bank branches for in-person services.

In short, consumer’s financial behaviors  — similar to other areas of life — are becoming increasingly hybrid. Consumers appreciate apps and tools that allow customers to deposit a check with just their phones. They have grown comfortable paying bills with a few taps on their phone or filing for loans from their living rooms. That said, in the wake of marked social distancing, the pandemic also reminded Americans of just how much they value in-person experiences. 

Key Study Findings Include:

• Customers are optimistic about their financial futures. While the pandemic caused increased financial stress and hardships, most consumers are emerging from the pandemic with an optimistic outlook and report new attitudes around saving and managing money.
  • Consumers are navigating through pandemic-related financial stress. While most consumers (76%) report dealing with financial stress, 60% remain optimistic about their financial futures despite downturns brought on by COVID-19.
  • The pandemic inspired new financial habits. Managing through COVID-19 created a greater disposition toward savings and clearing debts. Compared with before the pandemic, 42% of consumers report they are trying to save more; 40% report they are reviewing expenses more frequently. In addition, a sizable number (25%) are taking active steps toward financial freedom.
  • While 61% of consumers report they were only somewhat confident in managing their money during the pandemic, digital banking tools are helping to close this gap. More than half (58%) of consumers report that their use of financial applications or programs has increased since the beginning of COVID-19 — and 67% of consumers list their banking app as their most trusted financial tool.

• Digital banking tools bring efficiency, yet customers have renewed appreciation for in-person experiences. It’s no surprise that the pandemic inspired more consumers to adopt a digital-first banking approach. Notably, it also revealed that the human touch experienced at local branches is still incredibly important — altogether accelerating the future of hybrid banking.
  • Post-pandemic, nearly half of consumers (48%) prefer to bank digitally-only — while more than 30% will adopt a new hybrid approach, leveraging digital banking tools and in-person banking in similar amounts. In addition, 60% of consumers are convinced that digital banking tools will become the primary banking tool in the “new normal
  • Nearly half of consumers (42%) report they missed visiting their bank branch during the pandemic. The human touch that comes with conversation and a perceived sense of security of in-person handling are critical drivers for in-person banking.
  • Consumers value digital banking tools for convenience and ease. Still, they see less value in services that rely on insight and security — driving the opportunity to create more data-centric technologies and services. When it comes to preferences for digital banking, consumers value convenience (76%), accessibility (66%) and time savings (64%) above all else.

• Post-pandemic hybridization is also changing where, why and how consumers shop. Lockdowns have made people crave a degree of time outside of their homes, leading to a shopping preference that has a mix of online and in-person experiences.
  • Lockdowns have left almost three-fourths of consumers welcoming in-person shopping in some form. However, one out of four consumers (26%) will shop in-person as little as possible or shop exclusively online. In contrast, another 32% now prefer a mix of online and in-person shopping and only 27% plan to shop in-person, regularly.
  • As in-person experiences and travel opportunities re-emerge, consumers are willing to invest in big-ticket items. 62% of consumers are “very” or “somewhat likely” to make a big-ticket purchase in the future.
  • The pandemic has accelerated the adoption of real-time contactless payments over other forms of payment like cards, cash and check. Nearly half of consumers have used digital and mobile payments more since the pandemic (47% and 41%, respectively) — while 41% report using cash less often.

The Future of Banking: What’s Next

Digital Banking Behaviors 2021 finds COVID-19 has shifted many aspects of Americans’ financial lives. It has also given them a new appreciation for balancing access and convenience with the human touch of in-person experiences.

Going forward, banks can continue to extend their reach by evolving both digital banking tools and in-person interactions to proactively anticipate and support consumer needs amidst an ever-changing environment. This hybrid approach will be more ingrained — and dependent not on the needs of the bank but on what the customer wants, hinging on personalized and contextually-relevant experiences. To deliver this customer-driven imperative, banking institutions must approach transformation in three distinct ways — transform the experience, transform the tools and transform themselves.

At Capital One, we offer customers an overarching banking experience that reaches across platforms. We focus on creating transformative, personalized digital and in-person experiences  — from our award-winning mobile app to Capital One Cafés — to meet our customers where they are so they can manage their finances with ease. 

To read more, visit our blog for stories about how Capital One is innovating technology to transform banking and customer experience at Capital One.