Belgium 23.02.2021

The future in banking: Are consumers ready to shift online?

Digitization within the financial sector is boosting and many bank branches are closing their doors, but are we really ready for this shift to digital banking?

It’s a common news item for many years now: More and more bank branches are permanently closing their doors. According to the banking federation Febelfin, there are currently 4.692 bank branches in Belgium, which is about 40% less than the number of branches that were present 10 years ago (i.e., 7.744 branches). Belfius and ING announced just before the Christmas holidays that they will close more branches this year, which immediately makes clear that this trend of closing bank branches in Belgium will continue in 2021.

It is undeniable that there is a future in digital banking

According to bank leaders, the main reason for the closure of bank branches is that people prefer online banking over visiting bank branches for their financial matters more and more. If we look at the subscriptions to mobile and internet banking, for instance, we indeed see an annual increase in clients (Febelfin, 2020). This shift to digital banking would even be boosted now due to the Covid-19 pandemic (Belga, 2020), which is perfectly in line with the fact that cash payments and personal contact are discouraged and people now see the benefits of digital banking even more than before.

The switch from offline to online banking of consumers is also in line with the overall tendency of digitization. If we’re honest, I think most of us can say we enjoy the benefits of digitization in a wide range of categories. If I look at my own behavior, I rarely visit physical stores to buy clothes anymore, I book my holidays online after checking several websites to get the cheapest offer, and I haven't visited a bank branch for one year now.

Our annual GfK FutureBuy study validates that consumers indeed buy more and more online across a wide range of categories. In the period of 2020, about 1 in 5 consumers paid with a mobile banking application, either online or in a store. In 2019, however, this was only the case for about 1 in 8 consumers. We can all imagine how this digital banking behavior increased due to Covid-19.

Is the younger generation driving the online shift in the banking industry?

Especially younger generations are very active on the internet and even the youngest children know how to search their favorite videos on Youtube or Netflix. So, it would not come as a surprise if I told you that it is the younger generations who drive the digitization within the financial sector and hence, who don’t need bank branches. But is this really true?

GfK Belgium conducted a survey amongst (parents of) children, (parents of) teenagers, adolescents, and young adults to assess the preferences of these digital generations with respect to managing their financials. About half of the teenagers (aged 12- 17 years) already use at least one digital banking app on their smartphone. This gradually increases with age as we see that 97% of young adults (aged 25-29) using digital banking apps.

Remarkable, however, the research also shows that Belgian young people are reluctant to arrange important financial matters online. Indeed, about half of the younger generations prefer physically going to the bank branch for opening new accounts, loans, etc. for themselves or their children. Making a quick payment to a friend or checking their money on their account via an app is very convenient and pleasant, but when things become more important, even the digital generations seek personal contact.  

The importance of face-to-face interactions

To summarize, while many financial institution branches may not be profitable on paper and the number of visits is low, bank leaders should think carefully before closing their doors. Even in the digital world, physical branches remain a critical channel for many consumers. This particularly is true for the younger generations. Although young people are very mature in their digital behavior, they still value human interactions for sensitive matters like their finances. Building a relationship of trust is key to also address the younger generations. So, when banks answer this desire for personal contact in their services, they can deliver significant added value within the competitive financial world.

About GfK Consumer Life and Consumer Landscape

For this article, data is taken from the Strategic Youth Monitor that is part of GfK’s Consumer Life - A global, syndicated trend service providing visibility to cultural changes and disruptive forces so you can harness them for business advantage. Our Consumer Life reports are available on-demand and give you knowledge about all aspects of people's lives, including their aspirations, personal values, future world outlook and concerns, lifestyle behaviors, hobbies, consumption behaviors, and usage in health, finance, mobility, technology, media, and much more. 

The Strategic Youth Monitor is a syndicated project that examines the position of banks among Belgian young consumers (penetration and product market share). It provides insights into the financial knowledge of young consumers, which banking products they have, and how digitally mature they are in terms of banking. If you want to know more about this project, do not hesitate to contact

Article by Lize VanderLinden - Research Expert Marketing Effectiveness