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Online banking becomes smartphone banking

The Rise of Smartphone Banking: A Shift in Online Banking Trends

Smartphone banking has emerged as the dominant method of online banking. In fact, 67% of online banking users now access their accounts via mobile devices, marking a significant increase from just 64% last year and 52% three years ago.

Even more surprising, half of the online banking users aged 65 and older now use smartphones for banking, compared to just 33% last year. Additionally, 78% of Germans aged 16 and above engage in online banking, according to a recent representative survey conducted among 1,004 individuals in Germany.

“The coronavirus pandemic has significantly accelerated the adoption of online banking. Those who began using online banking during the pandemic are likely to continue doing so long after the restrictions are lifted,” said Achim Berg, president of Bitkom. The survey revealed that, while 32% of people aged 65 and older use online banking, the figure was much higher at 39% in 2021.

Among those aged 50 to 64, the adoption dropped slightly from 92% in 2021 to 84% in 2022, although it had been 87% in 2020. On the other hand, digital banking remains dominant among younger age groups, with 97% of individuals aged 16-29 and 30-49 banking online.

What Services Do Users Access Most in Online Banking?

Simple banking services dominate the world of online banking. The most popular activities include:

  • 92% checking account balances
  • 90% making bank transfers
  • 88% managing standing orders

However, more complex services are less commonly utilized. For instance, only 43% use digital banking services like ordering transfers or credit cards, or exchanging foreign cash for travel. Additionally, 24% express interest in utilizing such services in the future. A third (33%) manage investments and pension products online, with 26% indicating a desire to do so in the future. In comparison, only 28% use online platforms for personalized financial advice, with 30% considering it in the future.

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When it comes to loans, 15% have already taken out loans through online banking, but 21% are open to doing so in the future. Achim Berg states, “Online banking is no longer just about digital transfers. Customers expect a seamless and comprehensive online banking experience that allows them to perform all their usual banking tasks, wherever and whenever they choose. However, easy-to-use and versatile services are still in demand.”

Online Banking vs. Traditional Bank Branches

The shift towards online banking has put increasing pressure on traditional bank branches. A growing number of individuals are relying exclusively on online banking, with 41% of Germans now opting for digital-only banking services, up from 38% in 2021 and 29% in 2018. Meanwhile, 46% use online banking most of the time but still visit a branch occasionally, and 12% primarily visit a bank branch and only use online banking occasionally (compared to 7% in 2020 and 17% in 2018).

Interestingly, 45% of Germans believe that the absence of bank branches would not affect their banking experience. As Berg puts it, “Traditional bank branches are increasingly under pressure, and the classic brick-and-mortar model is becoming outdated.” Furthermore, 26% of Germans have already switched to online-only banks for their primary accounts. “Traditional banks should critically assess their digital offerings and business models, considering the shift in customer expectations. Partnerships with fintech startups and established digital companies can be highly beneficial,” Berg advises.

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