COVID-19 May Not Change Consumer Behaviour: EY

Only a quarter of bank customers expect to use online services more in the next 12-24 months – despite a spike in use during the COVID-19 pandemic, according to research by EY.

The global consulting and accountancy giant surveyed consumers across the US, Canada, the UK, Germany and France as part of a wider analysis of future trends, and found that 24% expected to bank more online in the next one or two years.

Just 16% said they expected the way they bank to change in the longer term because of the effects of the pandemic.

Banks of all sizes have been encouraging greater use of online and mobile banking services in the past two months as part of measures to combat the spread of the virus.

In a post on LinkedIn, Jan Bellens, global banking and capital markets sector leader at EY, said the pandemic had “radically impacted consumer behaviour worldwide”, with 43% of respondents to the survey saying they had changed the way they bank in the past two months.

“However, banks should be cautious in seeing this catalyst to digital channel adoption as permanent,” Bellens said.

“Customers state a desire to revert to previous channel preferences. If the banks want current behaviors to stick, even in the current environment, it will be necessary to learn real-time from the customer experience, address with agility the reasons customers would be reverting back and invest in targeted, personalized communication.

“Often this means investing more in support to vulnerable customers, addressing security and financial well-being concerns.”

JD Power’s annual banking satisfaction survey found that a reduction in branch-based services could lead to a fall in customer satisfaction.

The research company’s 1,000-point scale showed that branch-dependent customers’ overall satisfaction score was 824, 23 points higher than digital-only customers.

EY’s research also found that 20% of respondents expected to use less cash in the future. It reported a 57% fall in the use of cash, and an increase in the use of credit cards, debit cards, and online payments.

Bellens also argued that responsible banking practices were “more important than ever” as consumers’ priorities changed.

“For all banks, behaving ethically and doing the right thing will be important to consumers’ purchasing decisions,” he said.

More than half of respondents to EY’s survey said future purchasing decisions would be “impacted by banks actively supporting the community, being transparent in all they do, and ensuring they are doing good for society”, Bellens added.

“Conversely, 44% say decisions will be negatively impacted where they perceive banks to maximize profits during this time.”

Just 17% of respondents said they completely trusted financial service companies in the current environment, EY’s research found.

Connected to this, Bellens said banks should be prepared for more people relying on “extended support” as they recover from the financial effects of the pandemic.

More than a quarter (27%) of consumers expected their banks to be “more flexible in the future”, he said.