Valley banks are caught in the latest digital trend: One that is seeing customers making deposits at online entities and skipping the local branch.
The rising trend of deposits at online banks is not new, but it has increased since the pandemic closed branches and several regional banks recently collapsed. Experts say the popularity of direct banks is convenience and higher interest rates.
In 2023, online banks brought in more deposits than they lost while deposits fell at regional banks such as U.S. Bank, Truist Financial and Citizens Financial, according to the Wall Street Journal. For example, Capital One deposits climbed 5% from the previous quarter and Ally Financial rose 1%.
