Across the country, the light at the end of the coronavirus tunnel begins to grow closer, but that doesn’t necessarily mean that everyone is ready to go back to doing business in person if they don’t have to. In fact, the pandemic likely accelerated already apparent trends in online, mobile, and digital experiences intended to enhance convenience, speed, and customer retention. 

As such, CivicScience decided to take a fresh look at consumer trends in online and mobile banking, and how they’ve changed since our September report.

Surprisingly, though banks have shifted more and more resources to their online and mobile platforms (especially during the pandemic), consumers have recently been doing less and less of their banking online. 

Perhaps there is a pent-up need for advice regarding financial investments (especially with saved stimulus money) that require in-person meetings to resolve, and people have just been waiting for the pandemic to subside to arrange. 

Unsurprisingly however, the more likely people are to shop online for other products or services, the more likely they are to adopt online banking activities, and by significant margins.  

This relationship seems to also be related to other general uses of the internet, such as time spent on social media platforms. For instance, 81% of those who spend more than two hours a day on social media sites and apps report the majority of their banking activity is done online, while only 33% of those who don’t use any social media apps report the same.

You may be inclined to assume that likelihood to do the majority of online banking is correlated by age, but the data tends to show otherwise.

It turns out that people 25 and up all hover around the same margins for likelihood to use online banking, while Gen Zers wildly deviate, with nearly half reporting never banking online. 

Income also seems to have an inverse relationship with frequency of online banking, with those making under $50,000 a year per household seven points and ten points more likely than income groups above them to not do any banking online. 

Mobile Use

Our September report showed that trends turning away from using mobile phones to perform banking transactions were on the rise, and those shifts only continue to solidify.

After an up and down winter, those who don’t use mobile devices for banking have leveled out to 37%, close to its average since the beginning of last year. Meanwhile, those who use mobile phones for less than 50% of their banking needs rose two points over the last month to 30%, its highest level since at least January of last year. 

These mobile banking trends, as opposed to general online baking trends, do fall along predictable age lines, with the youngest three demographic groups using their devices for banking in relatively equal proportions. And as age increases, so does reticence to use a mobile device for online banking, with respondents 65 or older nearly twice as likely as their youngest counterparts to not use devices at all.  

So, even though Gen Zers are much less likely to utilize online banking in general, those that do are accessing their accounts on their phones. Meanwhile, people 55 and older, though much more likely to utilize online banking than Gen Zers, are much less likely to use their phones. 

Similar to what the data show about Gen Z’s mobile banking habits, those in lower-income brackets are more likely to use their phones, if they are banking online at all. Lower-income groups are using mobile devices for more than half of their online banking activity at the same rate as those in higher income brackets.  

But What About Bank Branches?

Despite shifts in trends in online and mobile banking, Americans haven’t changed much in the number of banks they have accounts with over the last several months of the pandemic. Those who have no bank accounts, similarly, have remained steady at 16%.

Additionally, it turns out, that despite all the online and mobile banking offerings banks develop to bring in potential customers, the biggest draw, by far for a new customer, is how close a physical bank branch location is to their home (26%), followed by “no particular reason” (16%). 

This trend of customers choosing a bank based on their proximity to it is consistent across all age and income groupings.

So while banks may be pushing online and mobile device use more and more, it takes a nearby physical door to get new customers…in the door. In fact, 73% of respondents report being within a ten minute drive of their retail bank.

This data runs counter to current bank trends closing countless branch locations across the country, which of course has been accelerated during the pandemic. What this generally shows is that customers are not nearly as discerning about bank offerings as they are for whether a bank is conveniently accessible, despite the rise in online banking emphasis. 

As the pandemic continues to subside and day-to-day life gets back to normal, CivicScience will continue to track consumer habits regarding online banking adoption against in-person activity.