The chatbot explosion
Support is the only category where every bank in our 2024 data-set — with the notable exception of UFCU — offers some functionality.
If anything, every incumbent from our 2022 dataset has increased their support capabilities, with Truist and Ally leading the charge. Truist has 20 support functionalities compared to 7 in 2022, while Ally's have risen from 15 to 25.
ChatGPT is undoubtedly part of the reason for this. Since taking the world by storm in November 2022, banks have been experimenting with it in a range of scenarios, with a particular focus on customer service.
But, market expectations are changing, too.
78% of US customers prefer to bank online, either through an online portal or mobile app. And 76% expect businesses, including banks, to offer some form of online self-service support.
The upshot is that chatbots — once a fancy nice-to-have — have been normalized. And if your customers can't sort out basic issues without leaving your app or online portal, you're at a disadvantage.
A race to stand out
Alongside the importance of digital support, the other surprising finding in our 2024 data is a spike in unique features.
In 2022, while some banks were more feature-rich than others in certain categories, they were, by and large, almost indistinguishable from each other. The majority, 15 out of 23, had identical or highly similar products.
The landscape looks radically different in 2024, with only 1 out of 40 incumbents —
NASA credit union — having no unique features.
Wells Fargo, the most differentiated incumbent in 2022, has fallen behind. It has 8 unique features, 7 fewer than it had two years ago, and is firmly in the middle of the pack. The most differentiated offerings now belong to Fidelity, Chase, and M1, with 16, 15, and 14 unique features respectively.
With challengers making inroads into their customer bases — Chime, for instance, had
21.6 million customers in 2023: 9.6% of the US market — it's likely incumbents are feeling the heat.
That said, functionalities are still distributed fairly evenly. Every incumbent in our 2024 data set has at least some capabilities in key categories like security, accounts and alerts, money transfers, and cards.
More to the point, just because more banks are offering unique features, it doesn't mean consumers' needs are being properly addressed. In fact, our data shows that, in 2024, incumbents are still failing to meet demand in areas that were underserved in 2022.
Differentiation in action:
Is the rise in unique functionality moving the needle when it comes to meeting market needs?
Despite some incumbents beefing up their capabilities in 2024, wealth management and junior accounts capabilities remain conspicuous by their absence.
In 2024, 11 out of 40 incumbents offer no wealth management capabilities, around the same number as in 2022.
The majority have actually decreased the number of functionalities they offer. Only four — Fidelity, Chase, Everbank (former TIAA), and Truist — have increased their capabilities.
In junior accounts, the situation is similarly unchanged.
Chase and Capital One have increased their capabilities, while Fidelity and Ally still offer the same number of features. But, 32 out of 40 incumbents offer no junior account functionality at all.
US banks are finally getting the importance of differentiation
But there's still a lot of work to do.
Developing unique features for its own sake won't cut it. Banks need to innovate with purpose.
That starts with understanding what customers expect, and delivering it in a seamless, intuitive, user-friendly way. But what ultimately sets leaders apart is that they anticipate consumers' evolving needs and address them before others can.
And that means access to complete, accurate, up-to-date digital banking research has never been more critical.
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