Traditional online banking is becoming smartphone banking. For the first time, two-thirds (67 percent) of online banking users are using their cell phones. A year ago, 64 percent were using their cell phone for online banking and only 52 percent three years ago. For the first time, half of the people aged 65+ are also using their smartphones for online banking.
Online banking becomes smartphone banking
Traditional online banking is becoming smartphone banking. For the first time, two-thirds (67 percent) of online banking users are using their cell phones. A year ago, 64 percent were using their cell phone for online banking and only 52 percent three years ago. Half of the people aged 65+ are also using their smartphones for online banking. A year ago, this figure was just 33 percent. Overall, 78 percent of Germans aged 16 and over do some or all of their banking online, compared with 80 percent in the pandemic year 2021 and just 73 percent in 2020. These are results from a representative survey of 1,004 people in Germany aged 16 and older. "Corona has given online banking a powerful boost. Those who used online banking for the first time during the Corona pandemic will mostly remain loyal to it even after the end of the lockdown and Corona restrictions," says Bitkom President Achim Berg. For example, 32 percent of those aged 65 and older use online banking, compared with 39 percent in 2021 - but just 22 percent in 2020. Among 50- to 64-year-olds, there is also a slight decline from 92 to 84 percent from 2021 to 2022 (2020: 87 percent). By contrast, 97 percent of 16- to 29-year-olds and 30- to 49-year-olds currently do their banking transactions digitally.
Online banking: Mainly account balance, transfers, permanent orders
Simple applications dominate online banking. For example, 92 percent check their account balance, 90 percent make transfers and 88 percent manage their permanent orders. Offers that go beyond this are accepted much less frequently. Only 43 percent digitally access banking services such as ordering checking or credit cards or foreign cash for vacation trips, but 24 percent can imagine doing so in the future. A third (33 percent) manage investment and pension products online, and 26 percent believe this will be possible in the future. Just 28 percent obtain individual advice on financial matters online, and 30 percent are considering this for the future. And only 15 percent have already taken out loans via online banking, but 21 percent would consider doing so in the future. Berg: "Online banking is more than just a digital transfer. Customers want to be able to do all the banking services they are used to online, whenever they want and wherever they want. What is often still missing are the easy-to-use offers."
Online banking puts pressure on traditional branch
The proportion of those who use online banking exclusively and no longer go into a branch at all has continued to rise. 4 in 10 (41 percent) use online banking exclusively, up from 38 percent in 2021 and just 29 percent in 2018. At the same time, 46 percent predominantly use online banking and also go to a bank branch now and then (2020: 53 percent, 2018: 51 percent). 12 percent say they predominantly visit a branch and only use online banking now and then (2020: 7 percent, 2018: 17 percent).
45 percent of Germans say they would miss nothing if there were no more bank branches. "The traditional branch of the bank or savings bank is coming under increasing pressure," says Berg. One in four (26 percent) have already moved their main account to an online-only bank without a branch network. A further 19 percent have firmly planned this for the next twelve months, and 22 percent can imagine it in principle. Only 31 percent still rule out such a switch. And 4 out of 10 respondents (40 percent) would consider opening a checking account with a digital company such as Amazon, Apple or Google, should such an offer become available. "Traditional banks should critically examine whether their digital offerings and business models are competitive in light of the fundamental change in their customers' expectations," says Berg. "Cooperations with startups from the fintech scene can make a lot of sense, as can collaborations with established digital companies."
When it comes to choosing a bank, costs and digital offerings are the deciding factors
Digital offerings play a significant role when it comes to choosing a house bank. For three quarters (74 percent), for example, a user-friendly online banking app is very important or rather important, 69 percent pay attention to a broad range of offers in online banking and 54 percent to the possibility of being able to use mobile payment methods such as Google Pay or Apple Pay. These digital factors are thus more important than many bank branches that can be reached quickly (53 percent), a well-known brand or personal advice at the counter (48 percent each) and customer loyalty programs such as points or rewards (42 percent). However, the most important factors in the choice of bank are generally the level of fees (95 percent), the level of deposit protection (93 percent) and many ATMs that can be used free of charge (91 percent). In addition, the bank's commitment to sustainability (82 percent), the bank's country of origin (79 percent) and fee-free access to cash abroad (79 percent) are important to 8 out of 10 in each case. "Digital offerings are not only for the very young target group a decisive factor in the selection of a house bank anymore. All banks would be well advised to make apps & co. the focus of their offerings," says Berg.
Digital consulting gains in importance
Digital financial advice is also playing a greater role. Meanwhile, one-fifth (20 percent, 2021: 16 percent) have received individual advice from the bank or a financial services provider by mail. One-tenth (10 percent, 2021: 9 percent) have received advice via text chat on the website or app, and a similar number (9 percent) have received advice via video call (2021: 7 percent). Only 2 percent have received advice via Messenger (2021: 3 percent). 35 percent used traditional on-site advice in person (2021: 37 percent), while 26 percent continued to seek advice by phone. However, there is a lot of room for improvement in the quality of advice. The best results were achieved with telephone advice, with which around two thirds (64 percent) were satisfied. Fifty-six percent each said they were satisfied with the advice they received via video call or e-mail and 52 percent were satisfied with the on-site advice they received in person. Not even half (42 percent) of those who receive advice via text chat are satisfied with it. Bringing up the rear is the advice via Messenger, which is only well received by 19 percent. Berg: "The high level of dissatisfaction with the quality of advice should give providers food for thought. Digital solutions make it possible to offer more individualized and location-independent advice. This potential needs to be exploited more." In this way, specialist expertise can be called upon for advice via digital channels, which is often not available in the necessary depth at a branch.
Loyalty to the house bank becomes more and more history
For years, loyalty to the house bank has been declining, and this trend is continuing. For the first time, more than half of Germans with a bank account (51 percent) have already changed the account they mainly use. A year ago, it was only 47 percent, and in 2018, only 34 percent. And those who have changed their bank account before will do it again with a certain probability. A third (33 percent) have already had four or more changes, 45 percent have changed three times. "If the new bank connection is just a click away, then no one can rest on their past successes. The willingness of customers to switch gives growth opportunities especially to those banks that develop innovative, digital offers," says Berg.
The main reasons for switching accounts are broader access to free ATM withdrawals (71 percent), lower costs (67 percent), a free credit card (59 percent) and better customer service (56 percent). A stronger environmental or social focus of the bank was a reason for switching for 45 percent, the better branch network for 41 percent, and a broader product offering for 39 percent. 3 in 10 (29 percent) switched because of a better digital offering, and among 16- to 29-year-olds the proportion is significantly higher at 38 percent. Other reasons for switching banks include a better image (22 percent), a recommendation from a third party (21 percent) or a switching bonus (20 percent). Advertising, on the other hand, hardly plays a role, being a reason for switching for only 2 percent.
Cryptocurrencies: financial industry could give Bitcoin & Co. a boost
The topic of cryptocurrencies, which has been hotly debated in the financial industry, could get a boost from an offer from established banks. Thus, around one fifth (18 percent) would buy cryptocurrencies such as Bitcoin from their own bank - 9 percent definitely and also 9 percent probably. So far, only 6 percent say they have already purchased cryptocurrencies. "Cryptocurrencies are not an investment vehicle for everyone. But they can play a role in an investment strategy," Berg said. "There is clearly a desire among many customers to enter the crypto market through their house bank."
Insurance: younger people already take out their insurance online
Online channels are not only gaining in importance for banking, but also for taking out insurance. Although a majority of 53 percent took out their last insurance policy in the traditional way, for example in the office of an insurance agent or broker (23 percent) or during a home visit (18 percent) or in a bank branch (11 percent). However, 44 percent most recently concluded their policies online. The most frequent conclusion was directly online with an insurance company (18 percent) or on an online comparison platform (15 percent). 7 percent used an insurance offer from an online retailer, for example for their new cell phone or electrical devices. In each case, 2 percent have taken out policies by mail or via online banking. There are significant differences between the age groups. Among younger people, for example, online policies already dominate. Fifty-six percent of 16- to 29-year-olds took out their last insurance policy online, while the figure for 30- to 49-year-olds is 53 percent. But even among 50- to 64-year-olds, only slightly less than half (46 percent) have recently chosen to take out their insurance online. Only the older 65+ age group is reluctant, with only one-fifth (22 percent) having taken out an insurance policy digitally. Telephone business, on the other hand, is dead, with only 1 percent having concluded an insurance contract on the phone. "For the insurance industry, too, the path to the online world is irreversible and mandatory," says Berg.
However, providers still have a lot of catching up to do when it comes to taking out policies online, because across all age groups there is a high level of dissatisfaction with the service. More than half (52 percent) of those who have already taken out insurance online say the process was very complicated (26 percent) or rather complicated (26 percent). Thirty-one percent found it somewhat easy, and only 15 percent found it very easy.
Find out more about that topic in Bitkom's official press release (German).