The COVID-19 pandemic could “radically change” how customers interact with their banks, according to research by Boston Consulting Group (BCG).
BCG’s survey of more than 5,000 people in 15 countries found that a quarter (24%) were either less likely to use traditional bank branches or would stop using them altogether.
However, consumers in the US were the least likely to change their behavior: 13% said they were less likely to use branches, while just 3% said they would stop using them completely.
Banks of all sizes have been encouraging customers to take up online and mobile services while reducing branch services temporarily as part of efforts to combat the spread of the virus.
The BCG survey found that 12% of US bank customers had signed up for online and/or mobile banking for the first time as a direct result of the COVID-19 crisis.
In addition, 29% said they had accessed online services more frequently and 42% said they had used mobile banking more frequently during April than they did a year ago.
BCG said that, across its whole survey, “millennial and Gen-Z consumers have particularly warmed to digital channels during the crisis, with 44% of participants aged 18 to 34 enrolling in online or mobile banking for the first time”.
BCG also asked consumers about their satisfaction with how banks have handled customer relationships during the coronavirus crisis. Its Brand Advocacy Index reported that overall satisfaction with US banks had fallen slightly, from a score of 19% to 16%.
This compared to a significant increase in consumer satisfaction in Canada: the index recorded a score of 21% for Canadian banks, up from 10% pre-crisis.
Globally, BCG reported that just 5% of respondents criticized their bank’s response to the crisis, while 25% had recommended their bank based on its response.
Among the measures introduced by banks to help customers cope with the financial impact of the pandemic, respondents rated waiving ATM fees and reducing loan interest rates as the most important. These were followed by waiving fees for cash advances and overdrafts.
“While it is likely that consumers will continue to switch from physical banking to online and mobile services, the personal touch provided by branch managers and customer service assistants remains important,” BCG said.
“Banks will need to rise to the challenge of embedding the benefits of in-branch, personal interactions within their digital offerings and, at the same time, improve on the holistic customer experience.”
BCG’s findings echoed those of a recent future trends survey from EY. The company polled consumers across the US, Canada, the UK, Germany and France and found that 24% expected to bank more online in the next one or two years.
However, just 16% said they expected the way they bank to change in the longer term because of the effects of the pandemic.