From cheque book to smartphone: a study by N26 reveals the future of banking

Over the COVID-19 crisis, we’ve seen how many of our habits have been changing as the pandemic has evolved. And when it comes to our money, it’s no surprise to hear that the entire Spanish population has been spending less across the board, has withdrawn less cash from ATMs—and, of course, visited branch banks less frequently.

As expected, traditional banks—like many other companies in different sectors—have had to adapt to the situation. And of course, they’ve had to align to our new behaviors and habits—this includes having to enable mobile payments for our security, to making improvements to their banking apps and websites to optimize customer experience. Luckily, this hasn’t been so much of a challenge for N26. After all, we’re already a 100% mobile bank, and we’ve been long prepared for remote banking.

To find out more about how our behaviors have changed in Spain, we decided to carry out a study back in April. The results were presented on June 23, 2020 in a virtual meeting with journalists—and we’ve love to share our most important take-aways from the report. Let’s go!

Like never before, more and more of us are moving away from banknotes—and it turns out that half of Spanish customers believe that ATMs and cash will disappear over the next five years! Customers are increasingly willing to adopt new, digital forms of payment, and we found that over 70% would be prepared to give up using cash. The same number also acknowledge that payments could very well soon become 100% contactless through the use of cards, mobile phones or even payments by voice or face recognition.

Face-to-face banking also seems to have its days numbered, according to opinions collected by N26. Almost 50% of bank account holders in Spain would stop going to their branch offices if their banks make it possible to do all their operations online. And one third would prefer to have their questions and issues addressed via an online chat. Furthermore, while 44% would like to have a mobile app or a WebApp to log into, 37% would prefer to conduct all of their banking business via their smartphone.

What exactly does this mean? Simply put, it consists of offering a high-quality, basic service for free and providing customers with the option to pay a fixed fee for added-value services. As is the case in other sectors—for example, Spotify Premium and Amazon Prime—this model could very well become standard practice in banking.

And according to the data analyzed by N26, over 60% of Spanish people would be prepared to pay a fixed monthly fee for services they consider to be essential in their “ideal bank.” These include benefits such as free international transfers and ATM withdrawals, zero fees on foreign currency exchanges worldwide, alongside travel, phone or mobility insurance, and special offers from big brands.

Over 80% of people we asked said that they turned to “traditional” banking for their daily needs, despite expressing dissatisfaction with the service they’re receiving. 44% of these customers said they would consider changing to a more digital banking system.

Ultimately, the report carried out by N26 shows that satisfaction levels with digital banking are way above those for traditional banking—51% of “digital” customers would give their bank the highest score, as opposed to 33% of “traditional” banking customers.

Click here to see the full report.

Methodology of the report "From cheque book to smartphone: the evolution of the banking system" Study carried out by Webtools, experts in Online Research, with responses collected through an online questionnaire among 1,000 Spanish Internet users from 18 years of age in Madrid, Barcelona, Valencia, Seville and Bilbao during April 2020. The limit of error for the set of the sample is 3.1% (with a 95.5% confidence margin).