In the era of coronavirus, banks have had to wean retail customers away from reliance on in-person transactions and point them toward the greater use of technology. Bankers say COVID restrictions hastened the trend in that direction.
“Ultimately, COVID-19 amplified existing behavior changes by forcing the issue with closures and restrictions on in-person meetings,” said Spence Broadhurst, president of the East North Carolina region for First National Bank. “That is something you see reflected in our investments in technology and the ongoing optimization of our own physical delivery channel.”
FNB’s retail customers increasingly have used online and mobile channels since COVID restrictions curtailed in-person contact, Broadhurst continued, saying “This was especially true with features that support transactions or activities that some customers may historically have chosen to perform in person.”
As examples, Broadhurst cited “dramatic upticks” in customers’ use of FNB’s online appointment scheduling feature available on its new website and “significant increases” in the number of mobile deposits and use of Zelle to transfer money between individuals.
Thomas Cline has seen similar behavior changes in Eastern North Carolina.
“We had a lot of [tech] tools before that people didn’t use,” said Cline, the bank’s regional president for Eastern North Carolina. “And we’ve added some mobile and digital features. Now most of our customers are using their phones or other mobile devices.”
Cline said that, company-wide, Wells Fargo is seeing an 11% year-over-year increase in retail customers banking remotely instead of walking into a branch. In Eastern North Carolina, that number is up 20%.
“I’ve been in this region 14 years; Eastern North Carolina has always lagged behind in terms of technology use,” he said. “Now you can’t just walk in to a branch, and access is by appointment only. For a while, transactions were going through the drive-thru, and on Fridays there was a backlog as people wanted to cash their paychecks.”
Those long lines drove customers to mobile deposit, Cline said, and now they are comfortable with the app and like the convenience. “Mobile deposits are up 35% nationally, year over year.”
Chris George, PNC’s senior vice president and Wilmington regional manager, has witnessed a lot of technology adoption within his organization. By the end of September, 67% of PNC retail customers were handling their transactions via mobile devices and ATM, compared with 58% at the same point last year.
“One customer I talked to, who had never used mobile banking, said, ‘It’s the best thing ever! I will never go back,’” George said. “We’re seeing an uptick in all demographics. And Zelle is being used heavily to [transfer money] to individuals.”
Consumers have also changed their money habits, according to George.
“Everybody is being a little bit more conservative in their spending and saving,” he said. “Deposits [to savings] increased 5% in the third quarter over the second quarter. In the third quarter, they were 39% over the third quarter of 2019. People are changing their buying and spending habits; for instance, they’re not going out to have dinner every night.”
ATMs have been doing yeoman’s work as in-person services – including drive-thru windows – have become problematic. George noted that PNC ATMs can now cash checks for customers, and Wells Fargo’s Cline said his bank responded to customer requests for a higher daily limit on withdrawals. Broadhurst cited FNB’s network of ATMs as part of his bank’s tech arsenal to address COVID-imposed limitations on in-person banking.
More enhancements of ATM technology are in the works, according to American Banker.
All three bankers pointed out that financial technology, however good and helpful, does not address all needs.
“Because customers need to have appointment [to see a banker in person], we have an app called ‘manage appointment,’” Wells Fargo’s Cline said. “It shows availability: you reserve a time and you get a guaranteed appointment. [Usage] has increased exponentially, more than 500%. People know when they get [to the bank], somebody will be waiting for them.”
PNC gives customers the option of virtual and phone appointments if they feel hesitant about coming into a bank branch, George said.
And, Broadhurst said, FNB has made major investments both in online and mobile banking, but has rethought its brick-and-mortar branch designs to make them more interactive and tech-enabled.
He said, “We will continue to optimize our branch network to accommodate changing preferences … while also making sure that the in-person interaction we do provide is as consultative and efficient as possible.”
Correction: This version corrects quarterly deposits info from PNC.