A recent report on digital banking metrics has highlighted both positive developments and concerning trends within the industry. The Digital Banking Performance Metrics study from Cornerstone Advisors, commissioned by Alkami, examines spending levels, user adoption, efficiency, and the impact of digital investments in banks and credit unions.
One of the key findings of the report is the significant increase in spending on digital channels and technologies by banks. In 2021, digital investments averaged around $220,000 per $1 billion in assets, which almost doubled in 2022 and nearly doubled again in 2023 to $780,000. This surge in spending comes as a surprise amidst banks’ focus on cost containment and reduction.
However, the report also highlights several troubling trends in digital banking metrics. Productivity, measured by the number of users supported per digital channel staff member, has dropped by 50% since 2021. Additionally, the percentage of new accounts opened digitally has decreased for the second consecutive year, while the average number of bills paid through banks and P2P transactions are on the decline.
Despite these challenges, there are some bright spots in the digital banking landscape. Consumer adoption of mobile deposit has increased by 50% since 2021, with the number of checks deposited tripling. Mobile payment usage has also grown, with users making an average of five transactions per month. Furthermore, the adoption of digital support services like chatbots has seen significant growth.
However, there are barriers hindering the progress of digital transformation in the banking sector. Banks are struggling to balance competing demands and prioritize digital investments, with a focus on internal productivity improvement. Fintechs and digital banks are outpacing traditional banks in new account openings, not just because of their digital capabilities but also due to offering better products that meet consumer expectations.
In order to stay competitive, banks need to reinvent their core checking and payment accounts to meet changing consumer needs, invest in refreshing their digital banking platforms to integrate third-party applications and AI-based tools, and address budgeting and prioritization issues. These challenges underscore the importance of ongoing innovation and adaptation in the digital banking landscape.
For those interested in exploring the full findings of the 2024 Digital Banking Performance Metrics report, a complimentary copy is available for download. This report serves as a valuable resource for bank executives looking to understand the current state of digital banking and navigate the challenges and opportunities ahead in this rapidly evolving industry.
