Online Financial Business Explosion. Does the corona crisis still make us the investor public? The trend shows a little bit, recent figures. One thing is sure: online accounts and depository accounts are increasing rapidly.
Online banks were among the winners of the corona crisis in the first few months. Your customers have opened millions of additional accounts and securities accounts. And that cannot be taken for granted in such uncertain times. The financial crisis from 2008 onwards suddenly stopped the trend towards internet banking. At the most extensive online banks in the republic, people are currently overwhelmed with cheers. The number of new depot openings rose twice as fast as in 2019. But the competition still wants to have topped that.
Digitization And The Stock Market Crash Push Forward Together
There are two drivers behind the boom in online accounts.
One is the digitalization par excellence forced by the crisis. If the bank branches are closed and it is best not to leave the house anyway, there is one less reason to pay for the on-site service and to keep your account as a branch account. And one more reason to open a new, purely digital account.
Second, Corona, as surprising as it sounds, has attracted new stock market fans. In the first half of the crisis, the number of online securities accounts rose significantly overall. In the past, the steep drop in prices at the end of February and beginning of March would have led to a see-you effect, and then more to a move away from the stock market. Now the realization seems to be gaining ground that at least one consequence of the crisis can be a long-term zero interest rate reality. Therefore, there is no getting around wise exposure to the stock market. There is enough money for that part of the population that has lost neither jobs nor sales. ETFs that track a stock index and individual stocks that are bought.
In this crisis, there is, of course, a lot to be said for digital banking. Already in everyday life: Wherever possible, customers should not only pay cashless in the supermarket but also at the baker’s and butcher’s. And where the digital systems of the domestic banks are not up to the requirements. From the customer’s point of view, the costs for online banking have long been significantly lower than for traditional accounts. And the differences have grown even more significant in the past few months. Many a bank tries to generate income that is lost in the interest business with small, hidden fees.
Not to be forgotten: Even the biggest fan of analogue processes has virtually prescribed a boost to digitization during the crisis. If you manage your everyday life in the virtual office or at school with Skype, Zoom, Teams, Slack or Jitsi, banking is just a digital piece of cake for you. The data protection scepticism, one of the main arguments against the online account, is pushed back by the lived practice. And customers can now apparently live better with the fear of digitally breaking their accounts. Of course, every online payment can still be tracked online.
Customer Requests In Times Of Corona
This column is not about the weal or woe of the banks, but that of the customers. So what should we as customers want from this development?
- First and foremost, digital banking, which had suffered a lot from the chaos surrounding the introduction of two-factor authentication over the past ten months, should now urgently become more convenient and at the same time remain secure. That is the core of the challenge.
- Second, the cost benefits of online banking should really be fully passed on to customers. We don’t need nonsense in the fee structure such as a ten-cent flat rate per account movement, cashing in through the back door and the like. Instead, banks should see digitization as an opportunity. You can look after your customers in a completely different way and make them new offers: from the app, which can do more than move money back and forth, to cooperations with young companies that may already do things better than the long-established banks.
- Thirdly, the banks will probably have to put up with the fact that customers use several banks and, increasingly, several checking accounts, depending on who makes the cheapest and best offer. That may be sad from the bank’s board of directors, but why shouldn’t customers compare prices nationally and shop accordingly when companies compare internationally? When the national databases finally arrive, which will further facilitate the price comparison for checking accounts, this trend is sure to continue.
- And finally: I have nothing against a decent bank branch as a supplement. But it should make sense for both: for the bank, but above all for us customers. Those who manage to offer competent advice (and not just sales) on-site, and still have costs under control will stand out even more visibly from the digital-only competition in the future. Mobile bank branches or video consultation hours can be the building blocks for this.