More than 80 percent of banking leaders say they have “little or no interest” in offering Buy Now, Pay Later services, according to a recent IntraFi Network survey of CEOs, CFOs and presidents from 426 banks.
The Q4 2021 Bank Executive Business Outlook Survey, conducted online from Jan. 4-18, found that only 14 percent of bank leaders wanted to offer the service by partnering with a fintech. Less than 5 percent said they wanted to offer BNPL on their own, or either already offer or actively plan to offer the service through a fintech partnership.
This comes after a recent survey from the data firm PYMENTS.com found that BNPL use more than doubled last year and is expected to continue significantly climbing over the next 12 months. Also, the report found that 70 percent of current BNPL users would be interested in using the option if it was available at banks they have long known and trusted. The report, based on a survey of 2,237 U.S. consumers between Nov. 5-10, found the percentage of current fintech users who would be more interested in a bank-issued BNPL even higher among the largest current providers: 79 percent of Afterpay users, 84 percent of those who have Pay Pal’s Pay in 4, and 82 percent of Klarna users.
Other key survey findings in the IntraFi report include:
- Most banking leaders expect their loan-to-deposit ratio to not return to pre-pandemic levels until either 2023 (43 percent) or 2024 or later (39 percent). Only 17 percent expect that ratio will normalize this year.
- Eighty-four percent of bank leaders said their institutions have not closed any branches since the start of 2020. Of the 16 percent who said they had, a majority cited cost reductions or a lack of customer foot traffic due to increased digital platform usage.
- More than 7-in-10 don’t expect capital levels to change in the next 12 months.