40-Stats-Highlighting-the-Growth-of-Digital-Banking

40+ Stats Highlighting the Growth of Digital Banking

Will visiting your local bank branch in-person become a thing of the past?

I sure hope not, I quite like my bank teller.

But these digital banking statistics showcase a growing trend around the globe. One that benefited the most from the global pandemic of 2020: the growing use of digital banking.

Are you looking forward to being able to visit your local bank again, or do you plan to conduct more of your banking digitally on your smartphone or computer?

Have you noticed a change in your personal behavior post-2020? What about your loved ones?

Let’s start with a few interesting key stats:

  • Bank teller usage in the U.S. declined 7.2% since 2015
  • Visits to bank branches make up just 10% to 25% of monthly transactions in Asia
  • 73% of global customers use digital banking channels at least once a month
  • The global digital banking market is estimated to hit $12 trillion by 2026
  • 25% of Gen Z do not own a checking account
  • 34% of Americans used mobile banking as their primary method of account access
  • 59% of the globe is using contactless payments more often post-COVID
  • 35% of consumers prefer video calls over face-to-face meetings with bank advisors post-COVID

What is digital banking?
Different sources may define it differently, but in a nutshell, digital banking is just an umbrella term for online and mobile banking. It’s banking, without going into a physical brick and mortar bank.

As someone who gets really excited about technology and what the future has to offer, I feel it’s also quite important to highlight the role local bank branches play in our communities. They serve as employers, consultants, financial lenders to those seeking to open small businesses, and most importantly just someone to talk to. There is something comforting about walking into a physical bank and having the teller or banker greet you personally and nurturing that relationship.

How many people are still using traditional banking?

1. Only 20% of U.S. consumers would rather pay a visit to a physical bank location than do their business via digital channels

(Source: ConsumerAffairs – Provident Bank Survey)

Just 1-in-5 Americans prefer going inside a brick-and-mortar location versus taking care of their banking needs digitally. How soon before people forget their bank teller’s name?

2. Bank teller usage in the U.S. declined 7.2% since 2015

(Source: FDIC – Household Survey)

Speaking of bank tellers, the demand for their services has continued to decline, dropping by -7.2% between 2015 to 2019. The data will certainly be skewed for 2020, given that most bank branches were closed for business due to the global pandemic.

3. 55% of bank executives view non-traditional players as a threat to traditional banks

(Source: PWC- Retail Banking 2020)

With growth hard to come by in the purely physical realm these days and the returns on physical locations diminishing, the costs of operating personal banking traditionally are starting to pile up.

Trust is at an all-time low, and the new kids on the block (neobanks) are challenging the way business is done through customer-centric innovation with the help of technology.

Executives of the biggest banks in the world are divided as to who will emerge as the winner in the coming years.

4. Visits to bank branches make up just 10% to 25% of monthly transactions in Asia

(Source: MarketWatch)

Visiting traditional bank branches for personal banking needs in Asia has for the most part been replaced with digital banking services. A staggering estimated high of 90% of monthly transactions are completed in the digital realm.

How many people have adopted digital banking?

5. 3 billion global users will have access to retail banking via phones, tablets, PCs, and smartwatches by 2021

(Source: Deloitte – Digital Banking Benchmark)

The first iPhone came out on June 29, 2007. Can you remember what the world looked like back then? Compare it to our modern-day habits.

Some people run their entire business from the little device in their pockets. As more and more users around the globe gain access to the digital world, digital banking will only continue to grow in usage.

6. 70% of customers look for consistent digital banking services when choosing a bank

(Source: Deloitte – Banking Industry Outlook)

Perhaps the most evident statistic when it comes to the growth of digital banking is that 70% of those surveyed expressed that they specifically seek out banks with consistent digital service options available.

7. 73% of global customers use digital banking channels at least once a month

(Source: Deloitte Insights)

At least once monthly, over two-thirds of people use either their phone, tablet, or desktop, for a variety of banking activities. Perhaps it’s paying the internet bill, transferring money between accounts, updating an address, or just checking to make sure the money is still there.

8. 59% of global customers use mobile banking apps at least once a month

(Source: Deloitte – Banking Industry Outlook)

It’s no wonder the big banks used to run commercials about their fancy new apps. Almost two-thirds of people use them on a monthly basis.

Personally, I am in the third of people category, of the ones who do not do this. I prefer my bank’s website instead. These days I only use my bank’s mobile app if I have a paper check to deposit.

The scan-to-deposit feature is a game-changer.

9. The global digital banking market is estimated to hit $12 trillion by 2026

(Source: GM Insights)

At a forecasted compound annual growth rate (CAGR) of 6%, the global digital market is expected to grow from $8 trillion in 2019 to a whopping $12 trillion by 2026.

Some of the drivers of growth include changing consumer behavior, growing FinTech popularity, growth of e-commerce, and supportive government policies.

10. Percentage of EU citizens using online banking doubled between 2009 and 2019

(Source: Eurostat 1)

The European Union has doubled its use of digital banking in a decade.

This statistic is for those countries that collectively make up the European Union, it’s population currently is estimated to be around 448 million, whereas Europe as a whole is somewhere around 743 million.

11. Norway, Iceland, and Denmark use internet banking the most compared to other European countries

(Source: Eurostat 2)

Perhaps it’s something to do with the cold weather? It gets pretty cold in Northern Europe.

Whatever the reason, 96% of Icelanders and 94% of Danes and Norwegians (respectively) utilize digital banking. It must be a Scandinavian thing, as the next 3 countries (Finland, Netherlands, and Sweden) are not too far behind.

What are people using digital banking for the most?

12. Most account holders use either mobile (56%) or desktop (29%) banking platforms for balance inquiries

(Source: Deloitte – Banking Industry Outlook)

How do you check how much money you have in your bank account these days?

It wasn’t too long ago that you had to defer to prior statements, or physically go and see a teller. In our modern world, the majority of people simply pull out their phones, or computers, and get real-time data.

13. 48% use mobile banking to transfer funds between their own accounts or send money to someone

(Source: Deloitte – Banking Industry Outlook)

While 38% use their laptops or desktops for online banking to send money to someone and/or transfer money between their own accounts, almost half of the respondents said they use mobile banking. As banks hastily work to make their service even more digitized, sending and receiving money should become easier and faster.

14. 54% of the globe is using smartphone apps to complete transactions

(Source: EY Future Consumer Index)

More than half our planet seems to be using their phones for banking purposes. Plus, ever since COVID contactless banking really saw an uptick. Fidelity National Information Services (FIS), which conducts business with the top 50 banks in the world, found that mobile banking sign-ups jumped 200% and mobile banking usage jumped 85% in April of 2020.

15. 53% of account holders make international transfers using a laptop or desktop computer

(Source: Deloitte – Banking Industry Outlook)

When I was growing up, my family used to send money to Europe, and I would have to go with my dad to Western Union to translate. These days, that same process requires an internet connection and a computer for more than half of bank account holders according to Deloitte.

16. 41% use mobile banking, and 44% use online banking to pay their bills

(Source: Deloitte – Banking Industry Outlook)

Almost half of the bills being paid these days are done so online. This digital banking statistic will please the eco-conscious among us.

The more people who opt in for paperless billing, the less paper we are wasting. I’m no climate scientist, but it seems like a good deal to me.

17. The total value of payments made using mobile devices amounted to $503 billion in 2020

(Source: Dataport.net)

If it wasn’t apparent to you up until now that the world is going digital, consider the fact that women in Tanzania who are traveling for critically needed surgeries are paying for their bus fares via text message. In Pakistan, people are no longer lining up outside the banks to get service, but are instead utilizing fully mobile bank accounts.

Similar stories come from all across the globe.

18. The global online banking market is expected to hit $20.5 billion by 2026

(Source: PR Newswire – Valuates Reports)

The rise in consumer acceptance of digital banking was already growing prior to the global pandemic of 2020, but the surreal experience and economic lockdowns certainly further boosted the normalization of banking online.

Similarly, the global mobile banking market is estimated to hit $1.82 billion by 2026. It makes you wonder, what will the future physical bank branches look like?

Digital banking statistics by demographics

19. Mobile banking usage is growing across all demographics

(Source: ValuePenguin)

According to ValuePenguin, digital banking is growing across all demographics.

Even as far back as the 2013 to 2015 interval, mobile banking among those aged 60+ doubled from 9% to 18%. Once again highlighting why most banks have ‘digital’ as their most critical delivery channel when it comes to seeking outgrowth.

20. 25% of Gen Z do not own a checking account

(Source: PWC – Digital Banking Survey)

About 1-in-4 Gen Z’s don’t open checking accounts.

Of the ones who do have an account, they are twice as likely to open it with a bank that is NOT their primary account, compared to Baby Boomers.

However, Gen Z’s are more likely to open up a credit card with their primary bank (79% of them) versus the 61% of Baby Boomers who chose their primary bank for their credit card needs.

21. Peer-to-Peer payment services are most used among U.S. households making at least $75,000

(Source: FDIC – Household Survey)

According to the Federal Deposit Insurance Corporation’s “How America Banks” survey, those making at least $75,000 are more likely to utilize online banking and peer-to-peer services such as PayPal, Venmo, and Cash App.

22. In Sub-Saharan Africa, the proportion of individuals with a mobile money account nearly doubled to 21 percent

(Source: Center for Financial Inclusion)

Digital banking growth statistics from Africa show us that as bank account ownership increased by only 4%, the proportion of people who held a mobile money account grew twice as much to 21%. This trend is presumed to continue globally, due to two-thirds of the unbanked individuals around the globe possessing a mobile phone.

23. Younger Americans turn to digital banking features more than their older peers

(Source: Statista 1 )

No shocker here. Younger people have practically grown up with a mobile device in their hands or at an arm’s reach. Their adoption of digital banking features is thus significantly higher than that of their older generations.

For comparison, in 2021, 48.6% of baby boomers use digital banking services, versus 77.2% of millennials.

Generation X is in the middle with about 69%.

24. 77.6% of millennials are forecasted to be digital banking users by 2022

(Source: eMarketer)

To get a better idea of where we are headed, take a look at the projection that 77.6% of millennials are projected to use digital banking. That’s almost 4 out of 5 people in this demographic.

Interestingly enough, almost half of them would not even consider switching to a digital-only bank.

Digital banking usage in the United States

25. 65.5% of the U.S. population uses digital banking

(Source: Statista)

More than two-thirds of Americans use some type of digital banking service. Whether it’s managing their money, checking their balance, paying bills, transferring money domestically and internationally, depositing checks, etc.

26. 34% of Americans used mobile banking as their primary method of account access

(Source: FDIC – Household Survey)

The use of mobile banking continues to grow and has overtaken online banking as the go-to method of accessing one’s account in the U.S.

In 2015 it was at 9.5%, then it grew to 15.6% in 2017, and as of 2019, it sits at 34%.

27. 22.8% of Americans used online banking as their primary method of account access

(Source: FDIC – Household Survey)

The use of online banking as the primary method of accessing one’s account declined steadily over the past 6 years. Dropping from 36.9% in 2015 to 22.8% in 2019. As American mobile banking usage for primary access continues to grow over the same period.

28. 89% of Americans use mobile banking channels

(Source: Insider – The Evolution of the US Neobank Market)

According to another study conducted by Insider Intelligence’s Mobile Banking Competitive Edge, nearly 9 out of 10 Americans reported using mobile banking. The same study clocked the millennial demographic using mobile banking at a staggering 97%.

29. 5.4% of U.S. household don’t have a bank account

(Source: FDIC – Household Survey)

Over 7 million households in the United States don’t have a bank account. Meaning no one in the house has a checking or savings account, at a bank or a credit union.

This figure is down from a recent high of 8.2% in 2011 to 5.4% in 2019, and the lowest it has been since FDIC began conducting the survey in 2009.

30. U.S. lost 5% of physical bank branches between 2017 and 2020

(Source: NCRC)

Between 2008 and 2020 America lost over 13,000 (14%) of its physical bank branches. Branches that were critical to local community access to finances, business lending, and as commercial tenants and employers of communities.

Some of these obviously can’t be migrated to the internet, such as being a physical tenant for an office building.

But aside from utilizing digital banking for personal finance, will American’s grow comfortable with digital business lending fast enough?

31. Only 28.4% of Americans visited a bank branch 10 or more times in 2019

(Source: FDIC – Household Survey)

The way things are going, you may find yourself saying to the younger generation, “back in my day we used to visit brick-and-mortar banks with tellers inside.”

All jokes aside, less than 1-in-3 reported Americans visiting a physical bank branch in 2019. And 17% of Americans said they didn’t physically walk or drive through a bank branch in 2019 at all, up from 14% in 2017.

What do the big banks think of digital banking?

32. 43% of banks anticipate increased investment in AI technologies at their firms over the next year

(Source: Deloitte – Banking Industry Outlook, Statista 2)

Your bank wants to know you. Like, really know you. In North America alone, AI’s worth in banking is expected to reach $78 billion.

They are investing heavily into AI-driven analysis to create a 360-degree view of me and you. All this with the goal of ‘hyper-personalized services’ in mind, meant to factor in every ounce of data they have on you.

If you ever find yourself staring at a screen and asking “how do they know that?”, you’ve just experienced the bank’s investment into AI hard at work.

33. 87% of bank executives believe innovation is very important in the banking industry

(Source: PWC- Retail Banking 2020)

As the world becomes more digitized, banking leaders are reporting innovation as the single most important factor for driving top and bottom-line growth in the next five years. In stark contrast, just 11% of them feel they are well-positioned to drive the needed innovation.

Executives also report smaller community banks and credit unions may be threatened the most in the years to come, and that the large global and national banks stand to benefit the most.

34. Bank of America continues to lead the U.S. industry with 30 million active users of its mobile banking app and more than 40 million online banking customers

(Source: Bank of America)

Bank of America’s digital banking platform is flourishing.

In Q2 of 2020, their digital clients logged into their accounts more than 2 billion times. Utilizing digital banking to make more than 133 million bill payments and booker over 665,000 appointments.

35. Chatbots will save the banking industry $7.3 billion in annual customer service costs by 2023

(Source: Juniper Research)

If you were running a business and had the chance to save 3,400% on Operating Costs, how quickly would you start?

A study by Juniper Research puts the banking industry in such a predicament. All they have to do is make use of the evolving Natural Language Processing tech in their chatbots and make them better at resolving customer queries in a fully automated way.

To put it into perspective, in 2019 the estimated savings were at $209 million. By 2023 the savings are projected to be around $7.3 billion.

This figure equating to the banks saving 862 million hours of working time.

36. Banks are investing the most into improving their digital banking products

(Source: Deloitte – Banking Industry Outlook)

According to global online banking statistics, improving the digital banking experience received the largest share of investments at $15.2 billion. A 44.76% increase in funding since 2015, when the figure stood at $10.7 billion.

In contrast, call centers and ATM improvements received $10.8 and $10.5 billion each in 2020.

How COVID-19 has sped up digitization of banking

37. 60% of the world’s physical banks remained closed or shortened opening hours or branches in 2020

(Source: Deloitte – Digital Banking Maturity)

The COVID global pandemic flipped the global banking channels upside down. With lockdowns implemented worldwide, 60% of physical branches around the world had to remain closed or reduce their working hours to comply with the efforts of fighting the spread of the virus.

38. 43% of Americans say they will shop more often online for products they normally buy in stores

(Source: EY Future Consumer Index)

It seems as though American’s have had a change in shopping behavior whilst quarantined in their homes. With 43% reporting, they plan to continue buying online those products they typically would purchase in stores.

Similarly, 44% of global consumers say they will do more grocery shopping online.

39. 59% of the globe is using contactless payments more often post-COVID

(Source: EY Future Consumer Index)

As one would expect in a global society stricken by a transmissible virus, touching was reduced.

According to Ernst & Young’s Future Consumer Index, more than half the world reported paying for stuff without making physical contact with the cashier or their surroundings. This trend has prompted many of E&Y’s clients to question how they can ‘digitize everything.’

40. 44% of retail banking customers said they are using their primary bank’s mobile app more often

(Source: EY Future Consumer Index)

Mobile banking app usage and registration jumped as well during the pandemic days. It will be interesting to see if this has in a sense forced more customers to adapt to using their bank’s mobile apps, and how this statistic will change in the years to come.

41. 23% of consumers had a Neobank account in 2020, 6% higher than in 2018

(Source: Accenture – Global Banking)

A neobank is an online-only financial institution. No physical branches.

One problem neobanks were facing prior to 2020 was a matter of trust. Only 8% of consumers trusted them to look after their long-term financial wellbeing, versus 29% of people with traditional banks who said the same.

With this 6% increase in neobank accounts, and with people becoming more accustomed to online banking, neobanks may be well-positioned to capitalize on the new norm by offering convenience, simplicity, and price to consumers.

42. 47% of consumers prefer to open a new bank account via website or mobile app

(Source: Accenture – Global Banking)

This comes from the 2020 Accenture Global Banking Consumer Study, which surveyed 47,000 banking consumers in 28 markets. The same amount of respondents in their survey said they preferred face-to-face.

43. 35% of consumers prefer video calls over face-to-face meetings with bank advisors post-COVID

(Source: Accenture – Global Banking)

Even though 85% of respondents have never spoken to a bank representative via video prior to COVID-19, more than one-third said they would prefer the video format to face-to-face meets.

Roughly 46% of people said they were comfortable continuing the video format even when their branches re-open.

Note on the numbers used in the article: In an effort to paint a fuller picture, the figures in this article were aggregated from numerous credible sources, who reported the results of their surveys at various points in time.

Parting Words

Whether it’s paying bills, transferring money from account to account, sending money to loved ones internationally, or just checking the balance, we are using digital banking more often than ever.

The pandemic seems to have exacerbated the adoption and further normalization of digital banking as well.

What do you think about these digital banking stats? Are you on board with the digitization of banking?


Sources

ConsumerAffairs – Provident Bank Survey | FDIC – Household Survey | PWC- Retail Banking 2020 | MarketWatch | Deloitte – Digital Banking Benchmark | Deloitte – Banking Industry Outlook | GM Insights | Eurostat 1 | Eurostat 2 | EY Future Consumer Index | Dataport.net | PR Newswire – Valuates Reports | ValuePenguin | PWC – Digital Banking Survey | Center for Financial Inclusion | Statista 1 | Statista 2 | eMarketer | Insider – The Evolution of the US Neobank Market | NCRC | Bank of America | Juniper Research | Deloitte – Digital Banking Maturity | Accenture – Global Banking

Finance grad turned digital entrepreneur. I've been investing in the stock market and real estate since 2010, yet I've still so much to learn! My goal is to speak hard truths when it comes to making, growing, and preserving your money on the often arduous entrepreneurial journey.

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