By Jeff Domansky Jan 26, 2021
US bank and credit union customers didn’t seem to miss visits and lineups at their favorite financial institution during the past year. In fact, in the space of 10 months during the pandemic, 42% of customers used mobile deposits for the first time.
Banks and credit unions haven’t been quick to eliminate branches with services deemed essential during the pandemic, but many temporarily reduced in-branch services dramatically to protect customers and staff. Instead, new online and mobile banking features and drive-through banking have grown popular quickly.
Mobile banking is another indicator of how fast financial services preferences and banking habits have shifted due to the coronavirus impact, according to the fifth annual Mobile Deposit Benchmark Report by Cornerstone Advisors and Mitek.
Mobile banking and many won’t change their new habit
According to the report, customers have embraced mobile banking, and many will no longer do most of their banking in-branch even after a return to “normal.”
“We are seeing the sort of increases in consumer use of mobile deposit that would have taken 10 years in normal times, but in pandemic times only took 10 months to achieve. And a huge percentage of these new users will not return to the old ways of depositing their checks even once the pandemic has passed. Higher percentages of customers using mobile deposit is the new normal,” said Mike Diamond, Mitek SVP and General Manager of Digital Banking.
With the safety and convenience of mobile check deposits, why would you get in the car for a trip to your nearby bank or credit union when you could deposit it at home? While we’re at it, who needs cash anyhow?
Five trends to watch in 2021
The report shows just how strong these new consumer banking preferences are:
- 85% of consumers using mobile deposit plan to continue doing this in 2021, with 8% not sure, and 6% not planning to continue
- 70% of consumers prioritize mobile deposit in the list of banking capabilities they look for
- Policy decisions, including check hold times and deposit limits, continue to constrain use
- Technology quality is the #2 issue for consumers, after policy decisions
- Design and user experience continue to dictate consumer satisfaction with mobile deposit and FIs.
There’s some clear insight for financial institutions as they seek ways to compete with new digital bank startups and competitors with features-heavy product and service offers.
What features do bank customers want?
Last year, 52% of respondents ranked mobile check deposit as one of their most important mobile banking features. In 2020, 70% said it’s an important or critical feature of their bank.I
The most “critical/important” features bank and credit union consumers want from their mobile banking app include managing balance or fraud alerts (77%); turning cards on/off and lost current reporting (77%); mobile check deposits (70%); credit report info (54%); person-to-person (P2P) payments (53%); tap-to-call customer service (48%); picture bill pay (43%); budgeting tools (40%); cardless ATMs (39%); scheduling branch appointments (39%); travel notifications (36%); and, surprisingly, Apple watch integration (31%).
Among the features not understood were Apple watch integration (22%), cardless ATMs (11%), picture bill pay (10%), and budgeting tools (7%).
The key mobile banking features used most by consumers in the past 12 months on their smartphone or tablet were checking balances (91%), bill payment (62%), money transfers between accounts (61%), mobile check deposits (40%), P2P money transfers (39%), viewing statements (34%), payments with Apple Pay or Google Pay (24%), and accessing coupons ordeals for discounts (14%).
At least half (52%) of customers had at least one problem with a mobile deposit in the past 12 months. Other problems included not getting funds fast enough (21%), difficulty getting a clear picture of the check for deposit (21%), unsure if deposit was successful (14%), low dollar limit prevented deposit (13%), inability to deposit many checks at once (11%), and confusion about how to use features (4%).
When it comes to the reasons for not using mobile deposits, banks should note 23% wanted faster access to their funds, 19% said their check deposit limit was too low, 17% said they had technical difficulties, 16% said they had exceeded their monthly deposit limit, 15% had security concerns about their deposit. Interestingly, 3% did not want their spouse/SO to see their check deposit.
Banks and credit unions, are you listening?
Best-rated mobile banking services
Cornerstone ranked the financial institutions’ mobile banking services, identifying several key insights about important policies such as low deposit limits and lengthy check holding time, both important features for consumers.
The top five financial institutions with the best overall mobile check deposit customer experience included US Bank, Chase, Fifth Third, SunTrust, and Capital One.
“Policy decisions played a big role in the 2021 rankings, as well. Fifth Third, which cracked the top three for the first time, made large strides in policy and risk management, cutting check hold time to five days, down from 14 in previous years. Chase, ranked number one in 2020, was knocked down a notch in 2021 and might have held the top spot with larger deposit limits,” the report said.
Fifth Third offered the highest personal deposit limit at $50,000, while Capital One had the best-recommended paper check retention at just one day. All 20 financial institutions surveyed offered auto-capture for the first time.
When you get right down to it, given the pandemic, mobile bank deposits were simply the right feature at the right time. The jump in adoption that happened in the past 10 months might normally have taken 10 years to rollout.
US bank and credit union customers seem increasingly open to other digital banking features on the horizon. More than anything that may dictate how many branches financial institutions need to retain in the future.
Cornerstone Advisors surveyed 1,968 US consumers in Q4 2020, and you can view additional 2021 Mobile Deposit Benchmark Report highlights or download the full 43-page report for free here.
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