Web research reveals changes in banking industry as new entrants multiply


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IWhile Internet searches can serve as a sort of popularity contest, the banking institutions that have garnered the most attention over the past five years are not America’s biggest banks. It is financial technology – or “fintech” – companies that have become particularly attractive during the pandemic. Searches for digital banking features, such as mobile check deposits, have also increased as U.S. banking habits shifted further away from in-person transactions.

Searches for alternative banks are increasing

According to Google Trends, four popular fintech brands – Chime, Green Dot, PayPal’s Venmo and Square’s Cash App – have seen an increase in searches on Google as they took hold in the banking industry, according to Google Trends, a tool offered by the internet giant that tracks the relative popularity of search terms over time.

About 4 in 5 Americans (79%) use mobile payment apps like Venmo and Cash App, according to a February 2020 NerdWallet investigation. Chime and Green Dot, meanwhile, have gradually built up their customer base, in part by serving Americans who have limited access to traditional banking services. They provide low cost bank accounts with large networks of ATMs and cash reloading. And their accounts serve as second chance bank options for people unable to open traditional bank accounts due to unpaid overdraft fees or other issues in the past.

The largest collective spike in Google searches for the four fintech brands occurred the week of April 12, 2020. This period coincided with the first round of COVID-19 economic impact payments – aka “stimulus checks”. Media coverage of Chime, Cash App, and Venmo at the time highlighted changes in their offerings that made them more attractive options for receiving direct stimulus deposits instead of waiting for checks in the mail.

“The pandemic has created financial uncertainty for a lot of people,” explains Chanelle Bessette, banking specialist at NerdWallet. “Quick access to funds, especially stimulus payments, has become a major concern and alternative banking services have been able to adapt to consumers. “

In mid-April 2020, Cash App and Venmo both added the ability to accept direct deposits so customers can receive stimulus money directly into their accounts, which is especially important for those who don’t. have no bank account. Google searches that week for “cash app” were up 32% from the previous week; requests for “venmo” increased by 12%. Both apps have seen several leaps in research throughout the pandemic.

Search volume of “chime”, the largest of the so-called neobanks, increased by 46% the same week in mid-April, compared to the previous week. The company was successful in making stimulus money available to hundreds of thousands of its checking account customers up to five days before April 15, when the U.S. Treasury sent stimulus funds to banks. Similar to how the company provides early access to directly deposited paychecks, Chime credited the money to customers’ accounts before receiving it from the government.

Green Dot Corp. is over ten years older than Chime and is known for its mobile-focused bank accounts like GoBank and GO2Bank, designed for low to moderate income Americans. It offers debit cards online and at thousands of outlets across the United States, including Walmart stores. Similar to Chime, Green Dot accounts provide access to direct deposits up to two days in advance. In the second week of April 2020, searches for green dot skyrocketed 257%, reaching an all-time high of searches for the term “green dot”.

“Cash App, Venmo, Chime, and Green Dot have successfully captured the attention of people looking for more accessible ways to manage their money,” Bessette said.

Research interest for large banks is declining

America’s four largest banks – Chase, Bank of America, Wells Fargo and Citibank – hold a significant chunk of consumer money, with at least $ 1 trillion in assets each. Unsurprisingly, they also get much higher search traffic compared to newer banking players. But searches for these banks have steadily declined over the past five years.

Comparing the research of each bank in the first week of August in 2016 and 2020, the term “chase bank” has dropped by 23%; “Bank of america” by 24%; “Wells fargo” by 37%; and “citibank” of 44%. These four institutions include the three largest bank branch networks, but competition with newer banking companies is mostly online, as the prospect of cheaper, mobile-focused bank accounts becomes more attractive to consumers.

Banking behavior is going digital

More than half of Americans, 52%, said they have visited bank branches less often since the start of the pandemic, according to a February 2021 report study of NerdWallet and Marcus of Goldman Sachs. And a third of Americans have tried or increased their use of digital banking services, such as mobile check deposits or online bill paying. But behavioral changes towards digital banking began years before the pandemic.

Google search volume for the term ‘mobile banking’ peaked in April 2020, coinciding with the release of COVID-19 stimulus payments, but the more technical term ‘mobile check deposit’ also saw its biggest increase this month. -this. Taking pictures of paper checks with smartphone banking apps has become more common as people seek to streamline their financial lives and avoid going to bank branches or ATMs.

The gradual increase in interest in searches for the terms “mobile check deposit” and “ATM cash deposit” may be related to the fact that more people are moving their banking transactions online, including including by opting for online-only institutions. Bank branches have long been the place for cashing checks and depositing cash, but as more and more exclusively online institutions, especially newbies such as Chime, are emerging, finding solutions bypass to process cash and checks may require research.

The pandemic, and in particular the stimulus payments that resulted from it, have contributed to several spikes in search terms around banking institutions and services that focus on quick or easy access to money. Chime, Green Dot’s GoBank, Cash App, and Venmo all offer direct deposit access days earlier than many traditional banks, which can be a big deal for anyone living in financial uncertainty or distress.

“Interest in mobile banking and mobile-focused financial service providers was expected to increase over time,” says Bessette. “The pandemic has just encouraged people to re-evaluate their management of money much faster than they otherwise would have. “

More from NerdWallet

Spencer Tierney writes for NerdWallet. Email: [email protected] Twitter: @SpencerNerd.

The Web Searches Reveal Shifts in Banking as Upstarts Surge originally appeared on NerdWallet.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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