Consumer banking changes … but there’s a lot that stays the same, too.

cbThere’s no doubt that electronic banking is a win-win for both bank customers and banks themselves. Not only has convenience been improved exponentially, but electronic banking has helped financial institutions expand the scope of their services without incurring as much of the cost associated with bricks-and-mortar branch banking expansion.

And yet … with nearly a half-century of electronic banking behind us, consumer attitudes about personalized banking services persist.

We’re reminded of this in Nielsen’s latest survey of American consumers, conducted this summer. The study shows that while apps, online banking services, and the granddaddy of them all — ATMs — have made banking easier than ever before, there’s still a fundamental desire for physical branches.

The reason? The “customer experience” plays a major role in financial services, and for many consumers, that experience plays out in the trust that comes with personal interaction.

Nielsen’s June 2016 research shows that consumers prefer using a physical bank branch for a variety of reasons — paramount among them being the personal interaction with bank employees.  Here’s how this and the other reasons stack up:

  • Personal service and interaction with bank associates: ~31% cited as a reason for preferring visiting a physical banking facility
  • Convenience: ~24%
  • Ease of use: ~14%
  • Concern about the security of a transaction: ~14%
  • The dollar amount of the transaction: ~5%
  • Prefer not to use a computer or mobile device to interact with the bank: ~4%

Note that an aversion to using computers or mobile devices is hardly a factor in consumers’ preferences to dealing with a physical banking location. It might have been at one time, but that factor is rapidly disappearing as a reason.

cnWhich activities are best “aligned” with the personal experience many consumers expect to receive? Nielsen found that these are the most important ones to accommodate: 

  • Opening checking or time savings accounts
  • Cashing and depositing checks
  • Seeking financial advice
  • Taking out a loan

The Nielsen study provides clues for financial institutions as to how they can align their products and services at each physical location — which might not be the same at each branch, based on the “dynamics” of the customer base being served.

More information about the Nielsen study can be viewed here.

How about you? How often do you take trips to the bank versus handling everything online?  Would you miss having your branch easily accessible if suddenly it was located more than 10 miles away from you?  Please share your perspectives with other readers.

What’s changing – and what’s not – in consumer banking habits.

Consumer Banking BehaviorsThose of us who live our daily lives online from sun-up to sun-down may need to be gently reminded that many people are only being brought to the online world kicking and screaming.

The results of a new survey on consumer banking habits underscores this fact. Market research firm Empathica Consumer Insights surveyed more than 15,000 Americans and Canadians on their preferences for how they do their banking. The results show that while Internet banking has certainly made its mark, many people still have a preference for traditional methods when it comes to transacting routine banking business:

 Prefer Internet banking: ~41%
 Prefer branch banking: ~33%
 Prefer an ATM machine: 23%
 Prefer a mobile (M-banking) channel: 2%
 Prefer telephone banking: 1%

Moreover, it’s when dealing with an account issue or problem that consumer preferences for “tried and true” banking interfaces really come to the fore:

 Prefer to visit the bank/branch office to deal with an account issue: ~60%
 Prefer the telephone to deal with an account issue: ~34%
 Prefer online contact to deal with an account issue: ~6%

What’s more, consumers’ brand loyalty to a banking organization is mostly dependent on their perceptions of how well the bank deals with account issues or problems — not everyday banking transactions.

The quicker and easier a bank addresses an account issue, people are more apt to be brand loyal – even when compared to consumers who have never faced a banking issue or concern with their bank.

In other words, the notion of “making lemonade out of lemons” is at work here.

What about other major transactions like applying for a loan or opening a new account? The survey showed that there’s the same preference for dealing with the bank in traditional ways – face-to-face.

One of the more surprising findings of the Empathica study was how few people are using the mobile channel for their routine banking transactions. At the moment, it’s barely a blip on the scale. One factor that may be at play is that more than half of the respondents say they don’t trust the security of mobile banking (whereas only a quarter don’t trust the security of banking by computer).

But here’s a nugget that may be a harbinger of future behavior … those consumers who do use the mobile channel for everyday banking transactions say they’re highly satisfied with this aspect of their banking, and they express a high degree of affinity with their banking institution.

Like we’re seeing with so many other market segments, the mobile channel appears to be lurking just around the corner …