The fact that non-financial institution disruptors are competing with banks and credit unions is nothing new. But COVID-19 has put that disruption on a fast track as these companies use their expertise in technology, consumer intimacy, operations and delivery to quickly deliver the financial services consumers want. To stay relevant and compete, financial institutions need to act on the lessons learned during the pandemic.

During spring 2020, when 95 percent of consumers reported being under stay-at-home orders, people adjusted the way they paid for goods and services, according to the Fiserv SpendTrend® Special Report. In-branch ATM usage decreased by 36 percent, and cash usage showed a decrease of 38 percent. Mobile check deposits grew by 27 percent, and there was a 33 percent increase in the use of mobile payments apps.

But the bigger story is the long-term behavioral change. As part of the SpendTrend Special Report, consumers were asked if they expect their increased use of the mobile channel to be a permanent habit. More than 60 percent of respondents said yes.

During the early months of the pandemic, mobile wallet usage increased by approximately two times as brick-and-mortar stores shifted to pickup or online. But by May this increase had plateaued.

Financial institutions should mine their own data to personalize messaging and help encourage and reinforce the continuation of these newly learned behaviors. On the contrary, if your data tells you that certain accountholders have declined in usage, it is likely they may be using someone else for these types of relationships. Consider strategies to improve and/or regain your top-of-wallet status for mobile wallet penetration.

The Consumer Has Changed. Have You?

COVID-19 not only illustrated the shift in how payments are made, but the transactions themselves also told a clear story, according to the 2020 Segmint Consumer Study that surveyed more than 600,000 consumers who made more than 150 million transactions over 17 months. The average grocery store ticket increased 27 percent from January to April, up from $40 to $51 but with fewer trips to the grocery. Why? Many consumers began working from home and the quick stop at the grocery on the way home moved to a more planful grocery store visit.

Subscriptions increased for many services during COVID-19. Video spending increased 97 percent in the first 10 weeks. Consumers also increased year-over-year spending for online courses by 159 percent. And home equipment and subscriptions increased 55 percent.

Consumer spending changed dramatically, but did your financial institution follow suit? For example, many debit, credit and other reward programs earn bonus rewards for use with gas stations, restaurants and travel expenses. With COVID-19, more than half of the most popular spending bonus categories no longer made sense to the consumer. They were traveling less, using less gas and may no longer see the value in travel benefits. Use your data to make product and services adjustments to help stay relevant.

Keep Using Data to Gain Insights

For all the things COVID-19 taught us, using data to make more informed decisions and move closer to personalized messages tops the list. While the number of data points may be extensive, the following represents data you can use to help manage and personalize the relationship on a recurring basis beyond the pandemic.

• The appearance of payday lending payments, new unemployment or stimulus checks/other supplemental income sources may indicate future financial hardship
• Competitive payments – products, number of payments and value of payments – helps identify impending financial risk when income becomes outstripped by these payments and those with your institution
• Declining deposit balances and cash deposits versus direct deposit may indicate the households is depending on tips and other nondirect payroll payments; if these cash deposits decline, another financial strain may be eminent
• “Gig” economy income such as Uber, Lyft or Airbnb could indicate an issue going forward as income from travel-related sources has been greatly impacted

Recommendations to Look to the Future

While many of these recommendations started with COVID-19, they are all rooted in the use of data to help build and enhance relationships with members or customers.

• Continue to mine your data to use personalized messages so the solutions provided to accountholders are more relevant and timely. Financial stress does not only happen during COVID-19;  it also happens during the normal course of life
• If you stay in touch with data and data changes, it will be more evident which products and services need adjustment in feature/benefit conversations to resonate with accountholders
• Continue the self-service movement. Consumers have indicated they will continue to use self-service channels post-pandemic. Encourage these behavior changes to help ensure long-term usage
• While financial stress may lead to the inability to pay loans, it may also be an early indicator of attrition when combined with other data points. Think in terms of the long game

Data-driven decisions will enhance personalization and make messaging and actions more meaningful to customers and members. Keep data at the center of your accountholder experience.