Survey Finds Most Americans Say They Can Now Manage Finances Without Physical Bank Branch
A recent survey commissioned by Plaid found that, largely due to the COVID-19 pandemic, most Americans have smoothly transitioned to digital banking and are increasingly turning to banking apps and fintech companies. 80 percent of Americans now believe they can manage their finances without a physical bank and 56 percent said they could not have handled their finances without apps and fintechs.
The survey was commissioned to find out if the current rise in mobile banking is simply a temporary consequence of the pandemic or, instead, a “new normal.”
“The majority of survey respondents used fintech before the crisis,” said John Pitts, Plaid’s head of policy, as reported by Crunchbase News. “When COVID-19 hit, fintech adoption accelerated and Americans reported using more fintech tools, more frequently, and for more financial tasks during the pandemic—59 percent of respondents stated that they use more apps to manage money now than they did before the pandemic.”
More than half of survey respondents said they plan to use three or more apps to handle their finances, and about 33 percent said they now use more apps for investing. Additionally, roughly 75 percent of respondents said they will continue managing their money digitally.
“Despite so many of the tragedies that have come out of COVID, it really has become a catalyst for behavioral change in consumers when it comes to fintech utilization across all the metrics that we tracked,” said Lowell Putnam, Plaid’s head of partnerships, according to American Banker.
Since the start of the pandemic, Plaid has seen a 44 percent increase in customer usage. Plaid has agreed to be sold to Visa for $5.3 billion, which will help Plaid continue to power companies like Varo, Venmo, and Credit Karma.
Plaid has also seen more engagement from regional banks and credit unions wanting to join the data ecosystem. The company wants to help oversee consumer access to the fintech economy with connectors like Robinhood for trading and SoFi for student loans.
“It’s easy to dismiss fintech applications as secondary or tertiary or backup or hobby applications for people who are really into managing their money,” said Putnam. “But what we’re seeing here is this is a critical lifeline.”