Americans are increasingly relying on mobile channels to access banking services, according to the FDIC’s biennial How America Banks report. More than a third (34 percent) of American households reported mobile was their primary method of accessing their bank account in 2019, up 18.4 percentage points from the 2017 survey. Most of the growth in mobile banking appeared to come from online banking, which fell from 36 percent in 2017 to 22.8 percent in 2019. Despite the decline, online banking was the second most common method used by U.S. households.
Mobile banking was the primary method used for customers 54 years or younger, at households that make at least $30,000 per year, and across all ethnicities. Those aged 15 to 24 (62.9 percent) and 25 to 34 years old (61.7 percent) overwhelmingly prefer mobile channels. People of color also reported higher rates of mobile adoption. Multiracial households (45.5 percent) were most likely to bank via mobile devices, followed by Hispanic households (41.3 percent), Asian households (39.3 percent), Black households (37.2 percent), then white households (31.4 percent). American Indian or Alaska Native households were less likely (30.5 percent), though mobile was still their most preferred banking channel.
Some demographic groups, such as rural households or those aged 55 years or older, were more likely to turn to online or branch channels. However, mobile channel usage recorded double digit percentage point increases across every demographic category except for customers 65 years or older, whose mobile usage increased 5.7 percentage points from 2017.
The banking industry has read this message loud and clear: 50 percent of respondents in the Bank Director 2020 Technology survey identified digital as the most critical delivery channel to their bank’s growth strategy (46 percent said that digital and branch channels were equally important). Banks have already invested in robust digital capabilities over the years. Nearly half of all banks offer full or partial digital access for retail and commercial customers to make deposits or apply for loans.
The industry isn’t resting on its laurels. The median 2020 technology budget for banks was $900,000 this year, up from $750,000 in 2019. Improving the customer experience (81 percent) and improving online and mobile offerings (39 percent) were among the top three objectives driving banks’ technology strategies going forward.
The importance of digital access was further highlighted following the onset of the COVID-19 pandemic. Nearly all banks (97 percent) say the pandemic has further accelerated mobile adoption among their customers. This aligns with the results of a new survey conducted by Morning Consult on behalf of ABA, which found that mobile and online banking adoption increased 3 percentage points each after the pandemic…