We’ve just published the first in a series of special reports on US consumer bank channel preferences based on a survey of 2,850 households conducted in Q4 of last year. This first report focuses on “physical channels” (i.e. branch, contact center, ATM) – the next two will address digital channels (i.e. online, mobile) and customer segments.
Some of the findings from the survey validated things that we intuitively “know” – for example, the online channel is important (which may seem rather obvious to anyone reading this blog after clicking on a link from my LinkedIn profile or tweet). However, the numbers provide some very interesting insight on the degree to which channel usage patterns are shifting – especially when it comes to the role of the branch. Most banks still consider the branch to be the ‘core’ channel within their distribution network, and use labels such as ‘alternate’ or ‘direct’ to talk about other channels. Quite simply, this view is no longer supported by the data. In fact, branch centric customers now represent 43% of the US population, with another 38% of customers being online-oriented, and 18% of the population being mobile-oriented – which is quite remarkable given the relative novelty of the mobile channel in banking.
The branch is no longer the destination of choice for a wider range of transactions than ever before (e.g. research, balance inquiries, withdrawals, transfers etc…). Yet, deposits remain very sticky at the branch with 58% of customers still opting for a visit with the teller. And, the branch is still the destination of choice for higher-value interactions (e.g. account opening, financial advice) and branch availability continues to impact customers’ choice of bank. Almost three quarters (71%) of customers state that branches and/or ATMs located near their home or work are important when selecting a bank. In fact, 68% said that they wouldn’t currently choose a bank that doesn’t have branches.
The key take-away is that customers are still attached to their branches, yet are relying on them less and less, especially for everyday interactions that are more convenient for them to handle using self-service and digital channels. This trend will only grow with shifting demographics, putting pressure on banks to better align the costs of their branch network with the value that it actually generates.
For a summary of the report, click here