How the Pandemic Has Changed Banking – Maybe Forever
How the Pandemic Has Changed Banking – Maybe Forever
COVID-19 has totally changed how we use our money.
By Ann Logue January 17, 2021
Like almost everything else, banking has changed significantly during the pandemic. More Americans than ever are navigating online banking thanks to social isolation, while banks have been placed at the center of the American government's loan program propping up small businesses.
If you've been looking for the best ways to bank in the midst of COVID-19, we've dug into some of the most significant changes for the industry.
More Mobile Banking
In April, banks reported a 200% increase in new mobile banking registrations. Customers used these to deposit checks, track balances, and transfer funds without visiting an ATM or a branch.
In an exclusive GOBankingRates survey, analysts discovered that more than 1 in 10 adults aged 18-54 use online banks, with a full 15.18% of adults between the ages of 25 and 34 doing online banking. (The figure goes down to 6.34% for those between 55-64 age group and 4.19% for those over 65.)
But when it comes to mobile banking – using an app – a staggering 42.93% prefer it between 18-24 years of age, 43.46% for the 25-34 age group, and 33.54% for the 35-44 age group. The figure goes down from there to 8.38% for those 65 and over.
"The split in old vs. young when it comes to banking with an app or banking in person at a branch just comes down to who was raised in which era and with what technology," GOBankingRates associate researcher Julia O'Brien says. "Those who are younger especially (18-24) grew up almost their entire cognizant lives with smartphones and most businesses having an app," she adds.
"So it only makes natural sense that they feel comfortable banking on an app, because most everything they have encountered in life indicates to them that app/mobile banking is just how things are done in a society."
Cash Use is Way Down
Early in the pandemic, there was a concern that coronavirus could be spread on surfaces. As a result, people wanted to use cash less. Some businesses stopped accepting it, and some consumers stopped using it. While the U.S. has a long way to go before it becomes as cashless as say Sweden, using less cash means fewer trips to ATMs or to local bank branches.
Business Banking Relationships Are More Valuable
The Paycheck Protection Program of the CARES Act, the first stimulus, gave businesses funds to keep people on the payroll, but it was done in the form of forgivable loans through qualified Small Business Association lenders. Banks that offer SBA loans – from the smallest banks in the country to major national banks – were inundated with application. Many prioritized their best customers, leaving some businesses shut out of the program, though some banks took this as their opportunity to shine.
Credit Card Travel Perks Lose Value
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