The pandemic has affected our way of life in numerous ways, one of the most significant being how we interact with one another business-wise, especially with regard to financial transactions. Although many people have been able to adapt to the social distancing changes that have impacted the way payments and other monetary matters are handled, others are having a hard time being able to come to terms with contactless interactions.
Many people are already used to conducting financial transactions online via digital banking and mobile remittance (bill pay) apps, but others have yet to jump aboard the digital train. These audiences often referred to as “traditionalists” aren’t very keen on changing the way they bank or the way they make payments. Although understandable, it’s essential to adapt to new trends, especially in the face of a global pandemic.
In this blog, we’ll look at how the pandemic has led to a significant increase in digital banking app usage, the benefits of online banking and bill pay, how financial institutions can help traditionalists acclimate to digital transactions, and how in-person financial institutions are quickly becoming obsolete.
How the Pandemic Has Increased the Value of Online Banking Apps
The pandemic has certainly contributed to a rise in online banking and banking apps, as many financial institutions have limited their hours or have closed altogether. Consumers are also wary of being out in public, which means they are less likely to visit financial institutions in person, regardless of whether they are open or not.
Digital banking and online payment processing enable users to make the same transactions they would otherwise carry out in person, but from the convenience of their smartphones, tablets, or computers at home. There’s no need to worry about becoming exposed to the virus, as app users need only to have Internet access in order to check their account balances, purchase or sell stocks, or pay bills from their Internet-enabled devices. Plus, unlike physical financial institutions that close by the end of the business day and have limited—if any—weekend hours, banking apps are available 24/7.
Beyond ease of access, banking apps also offer users the added benefits of being able to make payments faster as well as keep track of expenses. Users can schedule recurring bills to be debited from their checking accounts, reducing the chances of possibly missing a payment, having a check get lost in the mail, or overdrafting because the check took so long to clear that the user didn’t realize they no longer had sufficient funds available to cover the expense. Bill pay also puts the user in control of their payments since they can select the day their bills will be paid and the amount will be sent directly to the vendor automatically, instead of waiting for the vendor to debit the payment, which can take several days to clear and can also potentially cause the consumer to overdraft.
As far as tracking expenses, digital banking apps far exceed manual expense tracking. For one, tracking a digital footprint is much easier than tracking a cash paper trail. How many times have we looked in our wallets only to discover we had less money than we thought, then frantically try to retrace our footsteps to determine if the cash was spent, lost, or if it was even there to begin with? It happens to the best of us!
Many financial institutions also provide a convenient user interface that parses out transactions by types, such as grocery shopping, medical bills, and travel costs, which makes it much easier to track and manage expenses, as well as make budget adjustments if need be.
How Financial Institutions Can Help Acclimate Traditionalists to Digital Banking
While many people have been fans of digital banking apps for years, others are skeptical and prefer to execute financial transactions in person. These consumers are often referred to as “traditionalists” and generally tend to avoid any kind of FinTech app.
More often than not, traditionalists are an older demographic who may not have much experience with modern technology—nor want any. Their reasons for preferring physical banking over online banking can range from fear of being hacked to simply lacking the ability to navigate FinTech applications.
Whatever the reason, it’s clear that the shift from physical to digital banking will likely increase from here on out. Therefore, it’s important for financial institutions to help traditionalists understand the benefits of digital banking and assist them with becoming familiar with web and mobile tools at their disposal so they too can reap the benefits.
Below are some of the many ways in which financial institutions can facilitate the change from physical banking to digital banking:
Provide Round-the-Clock Live Support
Traditionalists appreciate face-to-face interaction. They want to speak with someone about their financial transactions and obtain detailed, unambiguous answers to their questions quickly. Naturally, chatbots and automated phone assistants are the enemies of the traditionalist.
The simplest solution is for financial companies to offer 24/7 live support via phone and their banking apps. Traditionalists want to make sure they are heard and that their pain points are taken seriously. Offering the security that a live representative will be available at all times to assist in resolving their issues can help establish user trust in online banking and allow traditionalists to feel more comfortable using an app since they know they can get help if they run into any trouble.
Offer App Tutorials
Since most traditionalists tend to be of a more mature generation, they may be avoiding online banking because they do not know how to use these apps. Assuming that everyone will automatically be able to navigate a digital banking app can lead financial institutions to inadvertently alienate potential customers and deter them from using their applications.
A great way to offer that support to skeptical traditionalists is to provide a simple step-by-step tutorial on how to use the application. The tutorial should be readily available on the banking app as both a video and a written explanation. Bank representatives should also be trained to provide quick tutorials to customers who call by phone or visit the institution in person. If the banker is requesting assistance via the app’s chat feature, offer live virtual tutorials where the representative can share their screen with users and answer any questions along the way.
Ease Concerns by Outlining Benefits
Many traditionalists are afraid to use web and mobile banking apps because their information might get hacked. While hacks, fraud, and identity theft may occur, financial institutions need to reiterate the benefits of online banking apps and demonstrate that the pros outweigh the cons by a landslide.
If a traditionalist is concerned about having their sensitive information stolen, remind them that banks are required to abide by strict safety protocols and that the same systems in place for protecting customers when making in-person transactions are imposed for digital apps at an exponentially stricter level.
Just like with in-person transactions, banks will contact customers if they detect any potential fraud, such as a questionable purchase made out-of-state or for a large amount, and lock their accounts to prevent unauthorized access to the customer’s funds. It is also a good idea to explain that if a hack does occur, the consumer will not be liable for fraudulent transactions.
FinTech Trends Likely to Continue Post-Pandemic
The COVID-19 pandemic has solidified the need for facilitated banking and bill pay options. Even when the day finally comes that the threat of COVID will drastically diminish, consumers are not going to be as eager to resume in-person or cash-based financial transactions as they previously did.
It’s safe to say that digital banking apps are here to stay, which means that the sooner traditionalists can get onboarded by their respective financial institutions, the faster users will reap the benefits.
Incorporating elements like 24/7 live support, virtual video guidance, screen sharing, and other features that help traditionalists and other customers feel more comfortable managing their finances digitally is imperative, but also complex. If you are considering upgrading an existing banking application or creating a new one, consult with a FinTech apps development specialist who can offer advice and help you create a web or mobile banking solution that is user friendly and secure.