Payment interruptions in digital banking
With the accelerating global transformation of banking and payments, the industry has been disrupted from many angles due to web trends and the global pandemic.
“Consumers are digitally connected in almost every aspect of their lives, and it’s clear they expect the same from their banks and payment experiences,” says Entrust. “Consumers are expressing an overwhelming preference for digital offerings from their financial institutions.”
In a recent study, “The Great Payments Disruption,” Entrust seeks to uncover how this disruption has impacted consumer sentiment, preferences, and habits.
The company surveyed 1,350 consumers from nine countries, including Australia, Canada, Germany, Indonesia, Saudi Arabia, Singapore, United Arab Emirates, United Kingdom and United States, who have made or received digital payments in the last 12 months. The results paint a picture of where the banking sector is in 2022 and what the future holds.
“This study highlights how, more than ever, consumer banking is about digital interactions and that they need to create that digital experience with security at the core,” said Jenn Markey, vice president of product marketing. of Entrust.
“We found an overwhelming preference for online banking and a significant concern about fraud. More than two-thirds of consumers in our survey switched banks or credit unions after receiving a fraud or fraud alert. Financial institutions must combine rich digital experiences with proven security measures such as biometric security solutions to increase consumer trust and loyalty.”
A new banking landscape
Each section of the study examines a different aspect of banking and payments transition as more digital and contactless options become available to the consumer.
Some key findings include:
Omnichannel touchpoints are increasingly crucial in digital banking: In Australia, 93% of respondents say they prefer to do their banking online in some form or another. Proof that digital banking is the new normal. However, providing a variety of digital options is still key, as 62% say they prefer using their bank or credit union’s app, while 31% prefer their desktop web browser.
Some people still prefer in-person banking at a branch (7%). Overall, this aligns with global trends, and Entrust says it’s essential for banks to offer digital-first, omnichannel solutions to resonate with today’s consumers.
Customers are security conscious and lack of security can have negative consequences: 95% of respondents in Australia say they are concerned about the potential for bank or credit fraud as banking and credit becomes more digital. 23% of respondents had personal experience of these fraud risks, having received notification of a personal bank or credit fraud in the past 12 months. These incidents hurt customer loyalty, as 43% of respondents informed of a fraud changed banks or credit unions as a result.
Fee structures and flexible payment options give banks an advantage: Consumers are more likely to consider lower fees, digital solutions and security when choosing or switching banks. Consumers looking for high-quality, low-cost digital banking, new entrants or neobanks, could add to their current disruption by offering things like no-fee overdraft protection and unlimited currencies. There is widespread interest in the digital banking atmosphere, with 66% of Australians surveyed saying they would consider using a branchless online banking service for their banking.
More digitally issued cards could further fuel the rise of mobile payments: 63% of Australian respondents said contactless credit or debit cards were their preferred method of payment, while 28% said contactless mobile payments. Digital cards can be an effective selling point, as 56% of survey respondents in Australia indicated a preference for opening a bank account digitally.