For financial institutions, focusing on digital transformation has become extremely important. The shift to digitization accelerated during the pandemic when many people weren’t stepping foot into physical bank locations, keeping most of their interactions with banks virtual.

PaymentsJournal recently sat with Whitney Stewart Russell, President of Digital Solutions at Fiserv, and Steve Murphy, Director of Commercial Payments at Mercator Advisory Group to discuss Fiserv’s recent study and the key findings from it, as well as the advantages that financial institutions may have, and why trust is crucial to their success.

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Digital Behavior Shifts

Financial Institutions have historically enjoyed a high degree of consumer trust, but during the pandemic more consumers were drawn to the convenience that fintechs provided when it came to digital banking.

“It’s interesting,” said Russell. “One stat that I often share with customers as we’re talking about this change is from a study. Millennials were asked who they would feel most comfortable banking with, and it actually swung to fintechs and big tech because of the convenience those organizations can provide.”

“Maybe I don’t trust them as much, but I’m willing to migrate to them because of the convenience factor,” she said.

Now the pendulum is swinging back, largely because banks are following the lead of fintechs and upping their digital capabilities. “We’ve actually seen that swing back in our most recent research, where the trust factor associated with banks and credit unions is outweighing what was perceived as a competitive advantage from a convenience factor,” said Russell. “And we’ve also seen banks and credit unions make digital investment a top priority. So they’re starting to even the playing field. When you have an even playing field, you’ve got the advantage of trust.”

Financial Institutions are also adding new features to help extend the banking experience, with real-time payments and financial planning tools. By having all those tools in-house, integrated in a smooth digital banking experience, there is no need for customers to go elsewhere.