Banking is changing fast: a look at consumer trends from the past year
Consumer needs and preferences are changing, with more emphasis on budgeting and investing tools and less on physical locations.
It’s a wild time in the world of financial services. Financial institutions and their customers are navigating the highest inflation rate the U.S. has seen since the early 1980s. Recent bank failures—the first in over two years and the largest since the global financial crisis 15 years ago—have only added to the tension. And in the banking industry, as in every other sector, both businesses and customers are also changing with rapidly evolving technology.
Our latest research—a 2023 survey of more than 1,000 American consumers—takes a fresh look at how consumers’ perceptions about banking compare with 2022. In the midst of this highly fluid, ever-changing environment, our research captures the expectations consumers have for their banks, and the exploding popularity of the new wave of digital-first consumer banking options.
Customer needs and priorities are changing
More than nine out of ten consumers are satisfied with their current bank (92%, compared with 94% a year ago). So, that overall measure is stable. But what about some of the specifics that can drive not only satisfaction but also loyalty and long-term relationships?
Features that people care most about
The three top features in 2022—mobile app experience, online access, and fee-free ATM networks—each lost a bit of prominence, but they still top the list in 2023.
|Mobile app experience||58%||42%|
|Fee-free ATM network||58%||49%|
Physical locations and phone customer service continue to represent a second tier, but each is becoming less important. At the same time, budgeting tools and investing tools are gaining traction, along with interest in trading cryptocurrency.
|Phone customer service||40%||33%|
|Ability to buy/sell cryptocurrency||11%||19%|
Services people are using
Consistent with the findings above are the services that people say they’re using. Compared with 2022, more consumers are using personal budgeting, personalized financial advice, buy and sell crypto, and robo-advisor.
|Personalized financial advice||13%||22%|
|Buy and sell crypto||12%||20%|
The importance of feeling seen and heard
Customers want to know their financial institutions understand their needs and respond accordingly. In our October 2022 credit union study, 58% of those surveyed would be likely to switch to a new bank or credit union if they offered more benefits that could help you make your money go further. And 76% would be open to more communications from their bank or credit union if the messages were targeted to their interests and spending habits.
The rise of neobanks
In addition to the disruption driven by technological advances, the finance sector is also changing as digital-first banks, or neobanks, become more established. Capitalizing on the erosion of confidence in traditional financial institutions following the 2008 global financial crisis, neobanks also do a great job delivering on the kinds of solutions consumers say they are looking for—personalized advice, budgeting and planning tools, and remote access.
Overall awareness of neobanks grew from 69% to 80% between 2022 and 2023. And while digital-first banks are often positioned as expanding access to financial services, awareness is highest among high-income adults.
Neobanks are known for charging lower fees or even no fees—and yet that is not the most important draw among consumers we surveyed. Instead, they cited easy-to-use mobile apps, simple account opening processes, 24/7 service, and easy money management as their main reasons for opening accounts at digital banks.
|Banking consumer priority||2022||2023|
|Ease of opening an account||57%||41%|
|Easy money management||47%||44%|
Digital bank customers are also looking for features that support budgeting, planning and managing their finances and higher interest rates.
|Additional features (budgeting,|
saving, investing, loans)
|One-stop shop for managing|
Asked what they like least about their digital banking experience, 38% of consumers indicated security concerns, up from 28% in 2022.
How to adapt
While traditional offerings like physical branch locations and phone access to customer support are still important, the demand for technology-based solutions is growing. And customers are increasingly looking for tools that help them manage their money in the present and plan for their financial futures.
In the banking industry and beyond, we live in a digital-first world where people expect personalized experiences. Sustained investment in digital solutions and excellent UX are now the price of entry across sectors, and consumer banking is no exception.
Finally, in a tumultuous environment where security is an ever-present concern and consumers see bank runs in the news, brand trust is more pivotal than ever to acquire customers and cultivate their loyalty. This is especially true for regional banks, which are perceived as having less of a safety net, yet play a pivotal role in their communities and can be especially important for people in marginalized groups. As the U.S. treasury focuses on supporting smaller banks to maintain a sense of stability, those banks also need to reassure their customers.
Even in these tumultuous times, data makes it easier to understand people’s priorities and make informed decisions.