Coronavirus is Boosting Digital Banking Tools
The pandemic and its resulting restrictions on daily life are highlighting the importance of digital platforms, testing their mettle and demonstrating the power of tools banks lacked in past crises, according to a recent article in American Banker. Most banks are closing branches or limiting access, but unlike many service industries, banks have digital options that allow their customers to manage the vast majority of banking needs without leaving their homes, observes columnist Jim Dobbs.
“Online and mobile banking has grown increasingly popular, lessening the traditional role of branches,” says Dobbs. He notes that the industry’s total branch count declined by more than 1,500 over the 12 months that ended Feb. 29, according to data compiled by S&P Global Market Intelligence and that early signs indicate the pandemic could hasten the digital banking trend as consumer habits change.
“Digital adoption is off the charts,” said Todd Nagel, president and CEO of the $1.4 billion-asset IncredibleBank in Wausau, WI. The bank has closed the lobbies of its 15 branches, maintaining drive-through access but encouraging clients to use its mobile and online services. They have responded in droves, Nagel said.
Mobile application usage is climbing so quickly this month that it is difficult to track the precise growth rate. “It’s absolutely skyrocketed in the past week alone,” Nagel said, as clients use the app for everything from loan payments to paying bills.
While the virus is crippling large swaths of the economy, Dobbs reports that industry experts believe most banks are well-equipped to absorb shocks and continue to lend. The banking industry, he says, is better capitalized than it was a decade ago, and credit quality was exceptionally strong heading into 2020. Digital offerings are now a generation ahead of where they were during the last downturn, enabling banks to provide uninterrupted service.
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