The survey also found that global awareness of financial technology products was even higher, at 96%.
Adoption of Neobanks
Neobanks will pose a challenge to traditional banks in 2020 as more customers lean toward the convenience of digital-only platforms. A neobank is a digital- or mobile-only bank with no physical locations, and it provides users with basic financial services such as checking and savings accounts and money-transfer services.
According to the latest FDIC “National Survey of Unbanked and Underbanked Households” published in October 2018, 25.2% of US households either did not bank or were underbanked—meaning they may have had bank accounts but still used financial services outside the banking system to make ends meet. Neobanks are strategically targeting the unbanked population and tech-savvy millennials with their cost-effective structures (no monthly fees, no withdrawal or overdraft costs), along with offering personalized customer experiences (budgeting and money-tracking tools, real-time balances).
An August 2019 Finder.com survey conducted by Pureprofile states that 21.4% of US internet users ages 18 to 91 already used neobanks. About 57% of the same respondents said they believe that digital banking is more convenient than brick-and-mortars, and 8.8% of the respondents intended to open a digital-only bank account in the coming months.
The AI Evolution Continues
Despite relatively slow adoption, banks are increasingly looking to AI to improve their business operations and customer experiences using chatbots and fraud- and risk-detection features. According to an April 2019 report from IHS Markit, the business value of AI in global banking will reach $300 billion by 2030. North America is expected to become the largest market for AI in banking between 2019 and 2023, reaching $79 billion. However, Asia-Pacific, Europe and other global regions will roll out more AI solutions in the banking sector between 2024 and 2030.