More than half of Brits visit a branch at least once a month and only a quarter would consider using a purely digital bank, according to a survey from Accenture.
WOW a quarter of Brits would consider using a Branchless bank - however - the big question is how many of them would actually switch?
"Peter Kirk from Accenture's financial services group, says: "This year's survey underscores the growing complexity in how consumers want to interact with banks in the digital age."
I'd love to hear which channels the survey participants were engaged across.
There are still a lot of false positives here because a large % of banks require face to face for account opening in the UK, not due to regulatory framework, but bank policy related. I think once there is clear differentiation on this from Moven, Atom and
others on this front, you'll see dramatically different numbers on channel use.
The data I'm seeing from UK banks is actually different to what this survey tells us. The actual channel data shows that average UK visits to a branch annually is 1.6-2.5 times PER YEAR across the customer base. This number has been steadily reducing since
1995, and nothing in the data suggests that this is slowing or reversing. So I don't see how this survey correlates with that actual behavioral data.
My experience of UK online banking (admittedly now as a non-resident) is that it's primarily a historical transactional view with little future focused financial insight; personal finance management; advice or easy engagement. My current UK bank also makes
me go through a tortuous log in process - with a token to boot. It's not a truly digital experience and so probably no surprise people are still forced to us branches.
No bank I'm aware of is offering a digital-only onboarding experience, so it's not surprising young people start their financial life journey in branch. That doesn't mean they wouldn't if it were offered to them. How many millenials today have ever spoken
to an insurance broker?
I think Peter's point is incredibly poignant. The idea of digital only in an industry that makes digital engagement cumbersome is not a winner. First Direct and soon to be Atom will continue to make this mistake. Banks fancy themselves as digitally saavy
organisations yet rely on tech that is old: portals, even apps have not proven to get customers to engage with the new in a way that makes them abandon the old. Portals have not been successful in turning off paper, for example. We need to stop asking customers
to shift the paradigm and offer technology that feels the same as their old experience before they'll be true converts.
It doesn't surprise me that people are using branches more, as the main reason to use them is to talk about mortgages, and the housing market is recovering, particularly as the young are being Helped to Buy.
As for banks forcing you to open accounts in branch - I have opened accounts by mail before after signing up on websites - not sure if that counts, but I certainly didn't have to go anywhere.
Sorry but this is the most glass-half-full report of a survey I have read for some time.
1. You are forced to go into High St branches by the currently facile protocols enforced by the monopolists (see Brett's point above)
2. "Only" 25% of people would use digital. Given the low penetration of digital banks (as in currently next to nil) this is an astonishingly HIGH figure
3. You can bet that the figure for willingness to use digital will be 40% by next year and it will go on growing. 25% is already one quarter of UK and probably currently about 8m customers. Wow.
I am susrprised by Finextra's one-eyed view on this survey, which for me simply underlined the fact that the retail banks have to reinvent themselves to protect their maket share.
If you are elderly and do not know how to use a computer, or you are young and want to deposit grannies birthday cheque in your savings account, or you are a small business depositing cash takings, then you may find visiting a branch is your only option
for the time being?
Seriously grannie's birthday cheque is the best use case you can come up with for a branch that costs £2m a year and runs at a 25% loss?
Brett, I'm hoping my comment will accelerate adoption of scanned cheque deposits then will probably never have to visit a branch again!
Good point about cash deposits though. Maybe we'll need very secure drop boxes on street corners, and banks will be hiring all the redundant postmen to go and empty them?
Sit in a branch for a day and see how much time the teller line spends on cash deposits, then ask yourself whether the cost of carrying the branch for another "cost" is going to save the business case for the branch...
The cynic in me thinks branches still only exist because banks perpetuate ridiculously complicated customer experiences to accommodate ridiculously complicated product structures devised to work around ridiculously complicated back-end systems, bloated over
the years to prop up a business model relying on complexity. This creaking levee of obfuscation is about to be swept away in a tidal-wave of transparency thanks to the mobilisation of the internet. It's unleashing a once-in-a-century event - probably the biggest
innovation since central banks. Banking is no longer somewhere we go, it's something we do. We won't necessarily be doing it with banks (let alone branches) and it's going to happen way faster than we think.
I wasn't really talking about the business case - I was talking about the necessity to deposit cash. If it's not worth it for the banks, then we'll need to go cashless pretty quickly. Bring back Mondex - that was the greatest invention - we had it on our
uni campus. Far more interesting than Bitcoin... ;)
By the way - I'm Will. Haven't found a way of exposing my name without my company!
Peter's comment is one I shall try to re-tweet. Setting aside the messianic tone ;).....he is on the money. And he gets why the banks are in a mess (partially) and why the digital tide will wash them away.
Too many shots of coffee before writing Alex... ;-) However, I get quite agitated by the nonchalance of many bankers who seem to feel their industry model doesn't have the same vulnerabilities as others that have been transformed by digital. Just look at
how quickly digital third parties are creating disruption in traditional banking areas like lending - I read digital P2P lending is 3% of all non-mortgage lending in UK now. Payments is obviously the other key one already being transformed by mobile.
The most amusing thing is the title of the first related article below -
Branches on the precipice as Brits embrace digital banking
Difficult to reconcile the two stories?
@JamesP: Good catch! However, old adages like "change is the only constant" are very useful to explain away such "minor anamolies":)
© Finextra Research 2015