The proliferation of channels through which banking functions can be performed has increased in recent years with the development of a range of technologies. For some, this suggests doom to the traditional banking channel: the branch. A Protiviti report into customer behaviour finds however, that branches remain in demand for many seeking a personal touch and high-value engagements.
As technology develops further, new ways of doing business and providing customers with services are being created. Within the banking industry, pundits suggest that the development of multiple channels through which consumers can bank would see an end to the need for the historically important bank branch.
To see if the prediction is borne out by truth, Protiviti surveyed 2,000 consumers in the US to identify the perceptual and behavioural trends behind a number of banking and payment channels, considering in particular how the development of new channels has come to affect the old. According to the analysis from the consulting firm, based on data from the Federal Deposit Insurance Corporation reports, the number of bank branches has not changed significantly from the 2012 peak of 83,663. In 2014, the number of branches tallied 82,613, which is a 93% increase on 1984 when there were 42,717.
The addition of new channels – and their integration into an omni-channel – has not come to greatly affect the number of branches in the US. Those customers that do not visit their branch, use apps or the website to check their balance online in 66% of cases, those that regularly visit branches do so in 68%, while those that frequently visit their branch also check their balance online in 68% of cases. The area in which those that frequently visit their bank branch make the most of online resources are bill payments, at 51%.
The results of the survey highlight that the predicted shift away from using branches has not happened, but that the meaning and function of the ‘branch’ is changing. The branch is becoming a place for more high-value face to face agreements – such as loans, product advice and investment advice, whilst providing technology for customers to perform other simpler tasks online.
Eight out of ten or more
The survey also sought to identify the channel preference scores of those that visit banks frequently and those that do not. Customers that can most often be found at a branch, tend to speak most highly of the branch experience – with 53% of those respondents rating the branch experience an 8 out of 10 or more. On the other side, 51% of those that do not visit a branch rate the web experience an 8 out of 10 or above. For branch frequenters, the website is rated an 8 out of 10 or more by 29%, while 22% of those that do not visit branches rate them an 8 out of 10 or more.
Interestingly, those that more often use a branch, tend to be more enthusiastic about the phone banking channel, at 28% compared to 20%. Customers surveyed of both types are the least enthusiastic about the online chat option at 19% each.
App in demand
The survey also highlights that more and more banking actions are being performed through apps, with particularly the younger generations active in the new environment. Checking bank balance through a mobile app is performed by 85% of males and 81% of females in the 20-29 age group, and by 81% and 79% in the 30-34 age group. It drops off to 55% for both genders between 50-59 and to around 45% for those between 60-69.
According to the survey, customers are less likely to send money through mobile apps the older they get. In the oldest segment, only 14% of males and 12% of females transfer money through a smartphone, increasing slightly in the 50-59 range, where predominantly males are active, 22% vs. 15% respectively. The 45-49 age group, on the contrary, sees more females transferring money, at 27% compared to 22% of males. It is again the younger generation that is using the available channel the most openly. Just over half (51%) of males and 41% of females aged between 20-29 are sending money through an app.