While direct-bank customers rate their banks comparatively high, consumers and small businesses nevertheless continue to show a strong demand for the personal touch. Community banks and other brick-and-mortar institutions, which offer services to a broad consumer base, won’t be heading for extinction anytime soon.
Despite the widespread adoption of digital banking, consumers remain financial services omnivores. A recent J.D. Power survey found that 71% of all bank customers visited a branch over the past year, 14 times on average. Even among the tech-savvy millennial generation, 71% visited a branch, with an average of 11 visits, compared with 49% who use mobile banking. These visits make a positive difference, with overall satisfaction among those who visited a bank branch within the past year 27 index points higher than among those who didn’t.
Consumers continue to prefer branch visits to open an account, conduct major transactions, or get financial advice. The J.D. Power survey found that 78% of new accounts are opened in the branch. According to a separate Salesforce.com survey, 70% of respondents said nearby branches are important when selecting a retail bank, more than the proportion citing securing personal data and offering online services. A PricewaterhouseCoopers survey found that roughly 50% of respondents said they prefer in-person visits to open a new deposit account or apply for a new loan. Even millennials said they prefer face-to-face interactions to address budgeting and retirement planning.
In fact, many still prefer the human touch for routine business. A Fiserv study found 44% of consumers prefer traditional branches with tellers for their daily transactions, compared with 39% for online banking and 14% for mobile banking. Meanwhile, the growth in mobile usage appears to be slowing. A study from Bain & Co. found that consumers using their bank’s app surged from 32% to 52% between 2012 and 2015, but merely inched up last year, to 55%.
High-touch borrowers such as small businesses continue to value the relationship-based model employed by community banks, which provide nearly half of small-business loans. A survey from the 12 Federal Reserve banks found successful small-business applicants were more satisfied with community banks than any other type of lender. Community banks registered an 80% satisfaction score in the survey of borrowers, compared with just 46% for online lenders.
In-person banking remains a core element of the U.S. economy. But while the human touch remains vital to many banking customers, the challenge for banks of all shapes and sizes is delivering high-quality service in all available channels.