78% of People Now Prefer Digital Banking, Says Alkami Report

New Delhi, India – A recent report by Alkami reveals that 78% of consumers now prefer to do most of their banking digitally through mobile apps or websites. This shift towards cashless transactions and contactless payments has been accelerated by the COVID-19 pandemic.

According to the report, nearly 80% of financial institutions have seen an increase in cashless transactions over the past two years. About 60% of these institutions noted that the volume of cashless transactions has surged by more than 20%.

Allison Cerra, Chief Marketing Officer at Alkami Technology, stated, “The banking leaders of the future will be those that can harness data for the best use, gain a holistic view of their relationships, and meet the rapidly changing needs of digital consumers.”

Chad Rogers, Executive Vice President at Connexus Credit Union, observed that even millennials are moving away from traditional banking methods. “What we’re seeing, even with our millennial users, is that they’re no longer ordering checks, or making cash withdrawals from our ATMs as we would expect. Instead, they are self-serving from home or wherever they are. They’re moving money through our digital banking platform,” he said.

Interestingly, even though fewer people are visiting bank branches in person, their overall engagement with banks has increased. Thanks to the ease of mobile and online banking, customers are now interacting with their banks more frequently, often on a daily basis.

While cashless transactions are on the rise, the adoption of cryptocurrency is growing more slowly. Around 21% of financial institutions reported that their customers are asking for Bitcoin products and services. Although this is still a relatively small percentage, 35% of banks believe that offering cryptocurrency options could give them a competitive edge.

Banks are also feeling the heat from fintech companies like PayPal, Stripe, and Venmo. Jamie Dimon, CEO of JPMorgan Chase, has called these fintechs “enormous competitive threats” to traditional banking. Despite the competition, some banks are partnering with fintechs to stay relevant. According to the report, 50% of banks and 40% of credit unions have teamed up with fintech companies in the past three years to enhance their digital offerings.

Looking ahead, many experts believe that the future of banking will revolve around personalised experiences. However, only about a quarter of financial institutions are currently using hyperpersonalization to gain a competitive advantage. Data is also playing a crucial role in this digital transformation. Most banks are now using data analysis to improve customer experiences, guide decision-making, and reduce development time and costs.

Allison Cerra added, “We are now at a place where technology has democratised financial advice and counsel. It is no longer just the privileged upper class who can afford to get financially fit and prepare for the future.”