In the rapidly evolving digital landscape, your financial institution must continually evaluate and upgrade its digital offerings to stay competitive. More consumers are shifting towards digital banking services —and while the traditional brick-and-mortar banking model remains important — some could argue it is being superseded by a digital-first approach.
Modern consumers demand convenience, speed, and security from their primary bank. They expect to be able to access their accounts, transfer funds, and apply for loans or credit cards instantly and effortlessly. The rise of fintech companies offering innovative digital solutions adds to the pressure to keep up with changing consumer expectations.
Digital-only banks are experiencing unprecedented growth. According to Insider Intelligence, digital-only bank account holders are forecasted to grow to 53.7 million in 2025, up from 29.8 million in 2021. These figures highlight the necessity for traditional community financial institutions to take proactive steps toward improving their digital capabilities to stay relevant in the market.
Generational adoption of digital banking solutions is rising across all age groups. As reported by Bankrate, as of 2021, mobile banking was the primary choice of account access for 43.5 percent of U.S. consumers, making it the most prevalent banking method.
About one-quarter of consumers say they would prefer to open a bank account online but are unable to do so at their current financial institution.
Over half (57 percent) of millennials and 64 percent of Gen Z have an account with a nontraditional institution, such as a fintech. Consumers between 35-44 years old are most likely to use a digital-only bank, with 29 percent of those in this age range having a digital-only primary account.
This wide-ranging adoption across generations highlights the universal appeal and necessity of digital transformation.
However, simply having a digital presence is not enough. Community banks and credit unions must strive to deliver a seamless and intuitive service experience. The digital offerings should be user-friendly, easy to navigate, and compatible across different devices. Any friction or difficulty in the user experience can lead to dissatisfaction.
Consumers are increasingly expecting a wide range of services from your digital solutions:
Remember, meeting these consumer needs will result in a higher level of account holder satisfaction and loyalty.
When evaluating digital solutions, you should consider the following factors:
As digital transformation continues to sweep across the industry, community financial institutions that proactively evaluate and upgrade their digital offerings will be best positioned to retain their competitive edge. Those who wait to adapt risk being left behind in an increasingly digital and consumer-centric marketplace.
To learn more about modernizing your digital offerings, creating a successful digital transformation plan, or how to initiate an evaluation, contact the experts at JMFA to get started.
JMFA provides community banks and credit unions with evaluating your important vendor service contracts and more. Our team helps with negotiating a better rate and contract terms as well as vendor selection to help you deliver the best service to account holders. To learn more, contact your local representative or call us at 800-809-2307.