Americans prefer bank branch over mobile app

Americans prefer bank branch over mobile app
Published : 23 Feb 2018, 12:33:32
Americans prefer bank branch over mobile app
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Mobile banking apps keep getting better, but 60 per cent of Americans would still rather open a new checking account in person at a bank branch than on a phone, tablet or desktop computer, according to a new survey.
Set for release on Wednesday by consulting firm Novantas, the survey also found that half of US customers feel that online-only banks are “less legitimate” than those with branches.
The preference for visits to branch offices over online banking for some activity stems from being able to see someone to resolve any issues that may arise, the researchers found.
“Folks are still hanging onto this comfort of feeling like there is a branch nearby if, and when, they need it,” said Matthew Sharp of Novantas. Never mind that they are going to branches less often.
The findings show that banks that can afford to keep branch offices still have an advantage over online upstarts when signing new customers for primary accounts.
The results help explain why JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N) have said recently they will build branches as they spread into more cities. Bank of America is expanding this year into Pittsburgh. JPMorgan intends to add as many as 400 branches over five years as it moves into cities such as Boston and Washington, DC.
The Novantas findings are based on responses from 4,352 people contacted by email in September.
More US customers might be willing to open primary accounts online if traditional banks were able to better show that they can handle problems remotely, Sharp said.
But some banks still will not even change a home address for a customer without a personal visit, said Andrew Hovet, a director at Novantas.
Firms that are newer to taking bank consumer deposits, such as Ally Financial Inc (ALLY.N) and Goldman Sachs Group Inc (GS.N), have had an advantage in being able to design easy-to-use online accounts from the start, Hovet said.
So far online-only firms have mostly signed customers seeking the highest deposit rates for secondary savings accounts, not people setting up primary transaction accounts to anchor their finances, Hovet said.
Still, because Americans, and particularly younger adults, are doing more everyday transactions by phone, JPMorgan and Bank of America can build fewer traditional branches in new territories than would have been needed in the past.
They can open smaller branches, space them further apart and supplement their presence with more ATM kiosks, local marketing and advertising. Done right, they can win, for example, 10 per cent of new checking account customers in a market in which they have only 5 per cent of the branches, Hovet said.-Reuters

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