While digital banking is becoming more popular with consumers, the CEO of Citigroup believes that traditional banks shouldn’t move too fast when it comes to technology.
Michael Corbat used his own family as an example. “I often talk about my family and think about my 94-year-old father who forgets his pin by lunch every day, or my children who never go to a [bank] branch, and then there’s my wife and I who are in the middle of this somewhere,” Corbat said at the World Economic Forum in Davos, Switzerland, in a session titled ‘Shaping the Future of Financial and Monetary Systems.’
With that in mind, he cautioned that banks can only move as fast their customers are willing to go, adding that his company doesn’t want to “be so far ahead that we leave our customers behind.”
In fact, a 2018 Accenture survey found that 84 percent of U.S. banking customers still visit branches at least once a year, while less than half of people go weekly or monthly. In addition, 44 percent of customers said they never use their bank’s mobile app.
Still, FinTech startups are gaining steam in the banking and payments market. Germany’s N26, which launched in 2017, hit the one million customer mark in France last year to move past HSBC in the country and gained 250,000 customers just five months after launching in the U.S.
In addition, London-based Monzo hit a valuation of $2 billion as it expanded into the United States, while the UK’s Starling Bank has currently raised a total of £263 million as it approached its millionth customer last year.
For its part, Citigroup has made strides in the digital banking arena. In 2018 it launched new mobile capabilities on the Citi Mobile App for iPhone, including allowing non-Citi clients to connect their accounts across financial services providers. And earlier this year, the company reported that digital deposits were strong across existing and new customers, with the total at $6 billion for 2019, up from just $1 million the year before.
As for the future, Corbat said Citigroup has “a three-pronged approach” when it comes to technology. While the firm is not developing its own, it is actively buying, collaborating and offering to help in the creation of new tech for the financial industry.