Electronic Banking Explosion
The COVID pandemic has done much to promote electronic banking. Initially, banks began seeing an increase in debit card access and online banking enrollments because persons accustomed to using branches could not access them. Growth in Internet access during COVID enabled this growth.
Another new innovation was totally digital banking platforms and apps that have soared during the pandemic period. There is an increasing acceptance of artificial intelligence and machine learning that is providing a proscriptive market for this product. As a result, new customer behaviors are driving increases in digital banking. And apps allow for faster servicing, reduced processing times, and decreases in operational costs.
You’ve heard the popular names – Chime, Varo, Dave, Money Lion, Stash, QuickAccept, Marcus – to name a few. They allow for automated delivery of traditional and new banking products. They are innovative by allowing delivery of direct deposits earlier than the actual posting date; they allow transaction rounding to provide a savings resource; they feature free overdrafts, no minimum balance fees, and no ATM fees. A unique feature is that they offer a “start over” account for persons who have had questionable account performance in the past. They espouse themselves to be “Fintech Companies” but they are all owned by a “bank” and feature FDIC Insurance coverage. These organizations have seen amazing growth in 2020!
So, you ask how brick-and-mortar community banks are to compete? They’re not! We should embrace this technology as a means of reaching unbanked and underbanked individuals, who are primary users of technology. Everyone has a cell phone which grants immediate access to these digital platforms. What a great CRA and Fair Lending solution!
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