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COVID-19 rapidly reshaping banking and payments behaviours

Consumer financial trends tend to lead those of business and treasury, as we have seen across a variety of areas, including early acceptance of digital payment methods, use of biometrics, and mobile banking. For corporates in the B2C space, many of these trends are already being felt, while B2B corporates are watching on and extrapolating how changes around financial technology and data may impact them. With that in mind, a new survey from FIS exploring how the COVID-19 pandemic has impacted the banking and payments behaviour of consumers bears consideration.

It is clear that the COVID-19 pandemic and government measures to slow its spread are altering the way Americans bank, pay and shop on an unprecedented scale and with rapid speed. FIS surveyed more than 1,000 US consumers about the ways they are paying and banking amid social distancing and stay-at-home actions taken across the US since the COVID-19 outbreak. The findings indicate that the pandemic has accelerated the digital transformation of banking and commerce, and that these adjustments likely will not be temporary but rather mark a new normal in consumer behaviour in a post COVID-19 marketplace.

More than 45% of banked respondents stated they have changed how they interact with their bank since the outbreak of the pandemic. These findings were true across all generations surveyed, with 46% of Baby Boomers, 39% of Gen Xers, and 35% of Millennials saying they are using new channels such as online and mobile to do their banking.

The FIS survey also found that consumers are flocking to mobile wallets and contactless payment methods to avoid the exchange of paper money or checks during the current pandemic. Some 45% of survey respondents said they are using a mobile wallet of some type and 16% indicated they are now using paper-based currency less than before the pandemic. Additionally, 31% of respondents said they would use contactless or mobile wallet payments instead of cash and checks in the aftermath of COVID-19.

Some other notable findings from the survey include:

  • 40% of survey respondents said they will shop online more in the future than in store.
  • 38% said they will rely on food delivery services and take-out more often than they did before the pandemic.
  • 65% of respondents cannot meet financial obligations for longer than six months, notably 74% of Millennials and 76% of Gen Xers say they do not have enough savings to last longer than six months.

“The impact of COVID-19 has rapidly accelerated trends that we have been seeing for years in terms of banking and digital payments,” said Mladen Vladic, general manager, Loyalty at FIS. “Once consumers begin using convenient new digital services, few tend to go back to their old habits, so we expect this to be the new normal going forward. We are now further along on our path towards becoming a cashless society in the US, and perhaps looking at the end of the paper cheque altogether. These findings should be a wake-up call for organisations about the importance of taking a digital-first approach. Now is the time for banks and merchants to be reassessing customer experiences.”

About the data

Figures quoted are from the survey results of 1,030 consumers across the US between the dates April 3-5 through the Ipsos KnowledgePanel Omnibus study.

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