Pundits have long predicted the death of the brick-and-mortar bank branch – citing widespread closures of major financial institutions and correlating this with the rise of online and mobile banking.
And yet, according to the Federal Deposit Insurance Corporation (FDIC), the number of branches has almost doubled over the last 30 years, even as the total number of banks has decreased by almost two-thirds. Most of that increase has happened since 1995, the acknowledged dawn of commercially viable online banking.
So what’s the real story? Protiviti surveyed more than 2,000 consumers in the second quarter of 2015 to glean their banking and payment preferences. The results, published in our just-released 2015 Protiviti Consumer Banking and Online Payments Survey Report, showed that while online and mobile banking is the go-to option for many routine transactions, the neighborhood branch continues to anchor the banking relationship – even among younger consumers – and serves an important sustaining role as a center for financial advice and customer service.
Some stand-out findings from the survey:
- There is little to no correlation between frequency of branch visits and web and mobile banking use. For example, 49 percent of frequent bank visitors use their bank’s mobile app to transfer funds, compared with 50 percent of non-visitors of branches. While web and mobile banking have shifted a large percentage of everyday transactions away from older channels (checks, branches, ATMs), customers of all ages still want the convenience of visiting a branch if they are nearby, and continue to want human interaction for their more complex or high-value transactions, such as loans, product tutorials or investment advice.
- Frequent bank visitors tend to hold more credit cards, carry higher balances and be more engaged with other banking channels, especially ATMs and phone banking. Frequent and regular visitors are also more convinced than non-visitors that new credit card chip technology will make their transactions more secure, even if experience in Europe, where the technology has been in use for more than a decade, indicates that the drop in physical credit card fraud will likely be offset by fraudulent use of credit cards online.
What can we take away from all this? The more things change, the more they remain the same. Predictions calling for the imminent demise of branch banking have been and continue to be premature, to say the least. The bank on the corner may very well be different in the future than the one you are used to – more tech, fewer transactions. But there will still be a bank on the corner for years to come.
Read the entire 2015 Consumer Banking and Online Payments Survey Report here.