While digital banking still accounts for a small percentage of the overall pie, interest is growing in neobanks over traditional banks for some demographics who feel digital banking aligns with their needs.
For the study “How Consumers Use Digital Banks,” a PYMNTS and Treasury Prime collaboration, we surveyed over 2,100 U.S. consumers about their banking preferences, finding that interest is high among gig economy workers and digital-first consumers who like that tech edge.
As the study states, “The primary reason consumers are interested in using digital banks is for improved transfers: 43% of consumers say this is their greatest motivator. Thirty-three percent of respondents cited lower costs as a reason for interest, with 11% saying it was the most important reason; 17% cited better notifications, with 3% saying this was the most important reason for their interest.
“Millennials are also interested in digital banks because they perceive digital banks to be more secure and that digital banks provide earlier access to the newest technologies, among other reasons.”
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Our research finds that millennials, small- to medium-sized business (SMB) owners and consumers experiencing financial hardship are the most likely to make a digital bank their primary financial institution, with more than three-quarters of each using digital banking services.
Specifically, “PYMNTS’ data finds that 85% of freelancers, 84% of millennials, 83% of small business owners and 78% of consumers who live paycheck-to-paycheck and have issues paying their bills use digital banking services.”
Read it now: How Consumers Use Digital Banks
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