During the past three years, spending on digital has tripled for banks and credit unions, but what are those FIs getting for their investment?

At the inaugural Tyfone Thought Leadership Forum in Las Vegas Wednesday, Ron Shevlin outlined the results from Cornerstone Advisors’ most recent digital banking metrics report.

Shevlin, the firm’s chief research officer, said the survey polled about 90 financial institutions, of which slightly more than half were credit unions.

Shevlin said most of those FIs surveyed fall between $500 million and $20 billion of assets with the average at about $3 billion to $4 billion.

And what the survey showed most recently was that over the past three years, spending on digital has jumped from about $220,000 per billion of assets in 2021 to $660,000 by 2023.

“Overall, I think this is a very good thing,” Shevlin said. “It may be challenging from a budgeting perspective, but I think it represents the importance of digital and I think a lot of our participating financial institutions get that.”

Shevlin said the adoption of mobile deposits during the past three years is up 50%, although a good portion of that was driven by the COVID-19 pandemic. Still, many of the older consumers who were forced into mobile deposits when branches closed have continued to utilize it, he said.

Additionally, between 2022 and 2023, mobile pay adoption was up 50% year over year. Shevlin did say that only about half of the FIs involved in the survey were even able to report on mobile pay.

“So there are some challenges from a measurement perspective,” he said. “But we’re clearly seeing huge growth.”

Chatbot usage is another area where FIs have increased their spend.

Shevlin said between 2022 and 2023, the percentage of respondents to the survey that utilized chatbots tripled from 8% to 24%.

He said the surprising thing was in the utilization of chatbots.

The average monthly volume was about 4,000 interactions per month in 2023, which was consistent with the prior year.

“Which means one of two things happened,” he said. “Either the institutions that already had chatbots saw huge growth or the institutions that had new chatbots got up to speed very quickly.”

In terms of digital challenges, Shevlin said bill pay has been “anemic” for years from a banking perspective. He said even those consumers who are using the service to pay their bills are doing so less often.

On top of that, digital account openings is trending downward.

“I could not believe this,” Shevlin said. “I thought after the pandemic we were going to see a huge growth in digital account openings.”

But while roughly one in five accounts was opened digitally in 2021, that number fell to 18% in 2022 and 16% last year.

“I struggle to explain that because I really don’t think younger consumers, who dominate the opening of new accounts, really want to go into branches,” Shevlin said.

“Mobile deposit adoption over the past three years is up 50%. Many of the older consumers who were forced into mobile deposits during the pandemic have stayed with it.”

 – Ron Shevlin
Chief Research Officer
Cornerstone Advisors