The shift to digital-only banking is intensifying

A new Marqeta survey uncovers opportunities for digital banks to cross the chasm to accelerated customer growth

How do consumers today want to interact with their banks? We took this question to the market to find out. In partnership with Propeller Insights, we conducted an extensive survey of more than 2,000 adult banking consumers in the U.S. and U.K. The numbers indicate that despite some hurdles associated with trust and confidence, consumers are moving more and more of their banking experiences to digital and mobile platforms.

The front door of your bank is now an app

One of the most striking results of the survey is that twice as many people today prefer a digital banking experience over the physical branch banking equivalent. As many as 62% of Americans already conduct the majority of their banking online, compared to just 31% who primarily bank in person.

Over the next three months, only 30% of survey respondents expect to visit a physical bank, and if their bank closed all of their branches tomorrow, only 33% of Americans say that they would find this inconvenient. It’s not just online banking that is exploding — a full 69% of Americans expect to use their mobile banking app regularly.

Digital banks are becoming the next best banking option

The survey shows that digital banks are gaining strong traction in the market as a secondary banking option for many consumers. While only a minority of Americans (14%) use a digital bank exclusively, almost half of Americans (46%) use a digital banking service in tandem with their traditional bank.

As consumer relationships with traditional banks cool, digital banks are picking up the slack. Only 17% of Americans say they’re completely satisfied with their traditional bank, 30% have considered changing banks in the last year, and if they do change, 74% say they’d consider digital banks as an alternative.

Inertia is the biggest ally of traditional banks

As people re-evaluate their banking options more than ever before, what’s stopping them from going completely digital? A fifth (20%) of Americans feel it’s simply too much work to switch banks; a quarter (25%) feel it would be too disruptive, and 15% say they wouldn’t know where to start.

While consumer inertia is a strong influence, it’s not the thing holding people back. Digital banks also have some work to do before they fully earn the trust and confidence of consumers. More than half of Americans (54%) feel a digital bank is a riskier place to store their money and 48% say they would limit how much money they’d deposit into a digital bank. In the past year, 41% of people who use a digital bank as their sole banking provider experienced a bank error, compared to just 21% of people using a traditional bank.

Key takeaways for traditional and digital banks

This new research confirms that the vast majority of consumers prefer digital-first and mobile-first interactions with their banks. This upends how traditional banks need to think about the market, with an app and a card accounting for almost all banking interactions. We put the survey findings into a comprehensive report titled “The Digital Banking Survey Report, October 2019”. Click here to download the report.

Commenting on the survey report, Vidya Peters, Marqeta’s Chief Marketing Officer, said:

“This shift has paved the way for an entirely new cohort of digital-only banks and is a large driver behind why Marqeta sees modern card issuing growing into an $80 trillion opportunity by 2030. This study shines a spotlight on the levers that digital banks can pull to capitalize on the valuable consumer awareness and consideration they’ve successfully built in the sector.”

Learn more about Marqeta’s modern card issuing and digital banking solutions, or contact us to discuss your company’s specific needs.