The coronavirus impact has consumers nervous about their financial capabilities, with half of 1,000 surveyed consumers concerned about paying back loans and eight of 10 worried about visiting their financial institution.
The survey by New York City-based Lightico, conducted online on March 15, 2020, revealed the effect of the coronavirus on retail banking. The poll showed a significant shift toward digital means of interaction with their credit unions as well as other businesses is already happening, but consumers need more reliable connections.
Overwhelmingly people are worried, with 82% concerned about going to their local financial institution or grocery store and 56% are anxious about their ability to pay back loans (mortgage, car, etc.) in the coming months. The study from Lightico, which provides a customer experience platform, also found key banking activities in distress with 49% of consumers less likely to take a loan from a bank if it requires visiting a physical branch.
The younger generations appear to be more concerned about the ability to pay back loans in the upcoming months. Poll results showed that Generation Z is three times more troubled than baby boomers settling loans. When presented with the question, “Yes, I am concerned about my ability to pay back a loan in the coming months,” the breakdown by age was 76% for those 18-24; 60%, 25-39; 56%, 40-54; and 26%, 55-75.
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The current situation also heightened the focus on consumer demand for digital service, with 73% doing more remote work or errands due to the coronavirus and 63% more inclined now to try a new digital app or website than before the pandemic. When presented with the statement, “Yes, I am more inclined now to try a new digital app or website than before the coronavirus,” younger consumers indicated they were more inclined to try digital means — but the majority cuts across all ages. By age, those answering in the affirmation was 68% for those 18-24; 64%, 25-39; 61%, 40-54; and 58%, 55-75.
Nevertheless, 84% of consumers said they expect brands to find ways to maximize digital interaction to keep consumers safe, but 58% found their digital journeys still broken and requiring physical or offline efforts to complete banking interactions.
“Face-to-face customer interaction is not an option right now, which means that consumers must be able to complete all banking tasks digitally. Banks, credit unions – really all financial service providers – must offer entirely digital processes to serve customers remotely, Zviki Ben-Ishay, CEO of Lightico, said. He noted, “Unfortunately, in times like this, we are seeing that too many financial institutions still have broken digital channels, relying on branch visits and endless paper processes. It’s now critical to bridge these digital gaps to ensure business continuity and customer loyalty in today’s remote reality.”