Bank Customers of the Future Today

In retail, marketers expend countless hours every year trying to forecast what consumers will want to buy in the future. It takes a long time to design, source, manufacture, package, and get products on shelves (to summarize the retail production process) at the right time for consumers to purchase. The COVID-19 pandemic of 2020 has caused many manufacturing companies to slow down production, close temporarily or in some cases, close permanently. These changes have caused significant disruptions in the supply chain and the existing model of getting products to consumers has changed.

There are many books and articles written on what the consumer of the future will look like. Not only has the ‘what’ consumers will purchase changed, but the ‘how’ has dramatically changed as well. According to the U.S. Census Bureau Quarterly Retail E-Commerce Sales from the Q2 2020 release dated August 18, 2020, the total retail sales for Q2 2020 decreased 3.6% when compared to Q2 2019. The e-commerce sales in Q2 2020 accounted for 16.1% of total sales. This represents an increase of 37% from Q1 2020. Due to the pandemic, many consumers are purchasing online for the very first time. Even after COVID-19 is no longer an issue, consumers’ purchasing habits may have been altered forever.

Banking customers are not that different from retail consumers. The ‘how’ consumers have been conducting their banking business has changed as well. Based on the usage statistics of our financial institution customers, there was a 38% increase in digital logins comparing March 2019 to March 2020 and a 53% increase in logins comparing April 2019 to April 2020. Customers made significantly more mobile check deposits when comparing data to the previous year. The largest increase occurred in June with 17% more mobile deposits being made within June 2020 as compared to June 2019. Just like retail consumers have adapted to online channels, banking customers are dramatically doing more of their banking services online. This online shift will continue, which means banks must adapt to exceed the demands of their customers.

Open banking or open finance provides the customer the option to share their financial data with the third-party companies that they choose. The sharing of financial data has been occurring for many years and there are many different technologies like screen scraping, which is a process where a system uses existing login credentials and scrapes the data or information from the web page to be imported in another system. Application programming interfaces (APIs) are a much better solution for sharing data, as they provide enhanced security, privacy and transparency.

Automated Systems has recently partnered with Plaid to be part of their Plaid Exchange solution. This will enable our financial institutions to allow their customers to participate in open banking today. Users can connect their banking accounts to more than 2,600 apps and services that support Plaid today. This accounts for more than 80% of all financial technology companies in the US. Due to Plaid’s strong focus on security and privacy, they never store customer login credentials and neither do any of the apps and services. All access is accomplished through token usage. The customer must always provide consent to allow access. Allowing customers the ability to extend their existing account data from community banks to financial apps and services gives customers full control to their financial lives, while still retaining the accounts at their trusted bank. The world is different than before COVID. Customer habits have adapted. Businesses, especially community banks, need to adapt as well.

About Automated Systems, Inc.
Since 1981, Automated Systems, Inc. has been a leader in providing innovative core banking, digital banking, and data processing solutions to community banks nationwide.  An array of integrated applications provide partnered banks with tailored, cost-effective, competitive choices.  ASI delivers industry-leading technology backed by unparalleled in-house conversion, training and support teams; paving the way for progressive, top-notch customer service.  ASI corporate headquarters are located at 1201 Libra Drive, Lincoln, NE 68512, 1.800.279.7312.  For more information about banking solutions from ASI, visit www.asiweb.com.

About Insite Data Services
IDS data application hosting services combines secure and cost-effective core banking applications, enterprise-class servers and storage, and proven virtualization technology.  IDS hosts all of the bank’s servers in secure data centers that use state of the art security systems including identity verification and biometric scanning.  Insite Data Services also offers IDS On-Time, a full-service solution dedicated to back-office bank processing.  These operations experts allow partnered banks to focus on their most important asset, their customers.  For more information visit www.insitedataservices.com.