May 15, 2024
by Sagar Joshi / May 15, 2024
Modern customers expect faster, more diverse service options for digital banking. An omnichannel experience is now a must-have element for providing flexible services across multiple communication channels.
Technology and people’s expectations go hand in hand. It’s like Newton’s third law of motion, which states that for every action, there’s an equal and opposite reaction. For every technological action, people have equal and opposite reactions. Digital banking platforms are at the forefront of this technological action, making it easier for banks to host various financial services.
People have reacted in various ways. Explore the statistics below to learn about the future of digital banking.
The statistics below show the increasing influx of digital banks in the modern market. They provide superior, more cost-effective services than their traditional counterparts.
Traditional banks usually require a visit to a physical branch to access your account. Conversely, online banks operate without physical locations; all interactions must occur digitally.
Due to reduced operational costs associated with physical infrastructure, online banks can offer benefits such as lower fees and higher rates of return.
of consumers indicate their likelihood of switching to a digital-only bank.
Source: Business Wire
Let’s look at competing statistics to unpack traditional and digital banking facts.
Traditional banking | Digital banking |
77% of consumers rely on traditional banks as their primary or secondary providers, while only 57% of consumer funds are kept in brick-and-mortar shops. | Out of 43% of consumer funds, 35% of consumer funds kept in non-traditional accounts remain in digital-only banks and stand-alone digital accounts. |
Among the 65% of consumers using traditional banks as their primary provider, only 66% express satisfaction. | User satisfaction increases to 79% and 81% for users of digital-only banks (21%) and stand-alone digital accounts (7%). |
Consumer interactions toward digital banking are causing significant changes in banking operations. Many banks have reduced their branch staff according to customer traffic; some have even closed their branches. The access that digital banking services offer is just too appealing for busy customers.
The trends below tell the same story.
of consumers anticipate visiting branches less frequently. Nevertheless, 82% still consider having a nearby branch significant.
Source: EY
According to a Businesswire report from 2021, 5% of consumers prefer non-traditional financial services like digital-only banks and stand-alone digital accounts as primary service providers. The table below discusses consumers' preferences for digital-only banks according to age.
Age group | Percentage of consumers who prefer digital-only banks |
All age groups | 21% |
18-24 years | 24% |
25-35 years | 26% |
35-44 years | 29% |
45-54 years | 18% |
55-64 years | 8% |
Online banking refers to accessing various banking features and services through your bank's website from your computer. You can check balances, pay bills, and access additional features, like loan or credit card applications, through the banking portal. Read up on the key statistics in this area to discover where the industry is heading.
users worldwide turn to online banking at least once a month, while 59% use mobile banking apps.
Source: Deloitte
Mobile banking involves using apps on mobile devices, like smartphones or tablets, to access many of the same banking features. The bank provides these apps where you have an account, and you typically use the same login credentials as your online banking portal.
The statistics below discuss the benefits of mobile banking, its competitive advantage, and its grand entrance onto the scene.
of Gen Xers and 79% of baby boomers recognize its advantages and benefits for all generations.
Source: Insider Intelligence
Artificial intelligence (AI) is rapidly transforming the banking industry, bringing benefits in several key areas. AI is making banking faster, more efficient, and more secure for banks and their customers. As AI technology develops, we expect to see even more innovative applications emerge in the banking sector. Read about some key statistics in this field.
of financial institutions globally are putting machine learning at the center of their business models.
Source: WifiTalents
Digital banking is prone to cyber threats. In 2023, the Reserve Bank of India (RBI) reported bank frauds amounting to over 302.5 billion Indian Rupees. With massive digital transactions, traditional fraud or scam monitoring services need to catch up to the modern cybersecurity challenges banking institutions face.
of respondents indicated that their banks perform fraud risk assessments just once a year
Source: Deloitte
Online banking offers numerous advantages over most traditional banks. Customers get the ease of accessibility, personalized experiences, and, most importantly, flexibility.
Although security tactics need more work, digital banking platforms are on their way to bridging any gap between modern customers and the complex banking sector.
Learn more about the rise of digital transformation in banking.
This article was originally published in 2023. It has been updated with new information.
Sagar Joshi is a former content marketing specialist at G2 in India. He is an engineer with a keen interest in data analytics and cybersecurity. He writes about topics related to them. You can find him reading books, learning a new language, or playing pool in his free time.
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