Canadian bank branches losing ground to online channels

Canadian bank branches losing ground to online channels

The traditional bank branch continues to lose ground in Canada as consumers conduct more day-to-day transactions at self-service banking machines (ABMs) and over the Internet, according to an annual tracking study by TNS Canadian Facts, a Toronto-based marketing research firm.

TNS' 'How Canadians Bank' study found that just over half of the near-2000 Canadian adults surveyed (53%) visited a branch in the month prior to the survey, the lowest level of branch banking reported since the study began in 1994.

At the same time, online banking continues to attract new users, with 37% of Canadians using an online banking service in the month prior to the survey, compared to 34% in 2005. Six out of 10 Canadians with Internet access have signed up for online banking, says TNS.

Usage of ABMs has also shown modest growth over the past year. In autumn 2006, 81% of Canadian adults had used a bank machine in the month preceding the survey, up from 78% in 2005.

Deposits of cheques and cash at ABMs now outnumber in-branch deposits by a ratio of two to one, notes TNS.

Rhonda Grunier, a vice president at TNS observes: "We are seeing a continued trend toward reliance on two main modes for day-to-day transactions: online banking and ABMs."

However, while Canadians are interacting with staff at branches less often for routine banking activities, this does not mean that the branch is becoming irrelevant or obsolete, cautions Grunier.

"Canadians continue to prefer to go their branch to make RSP contributions and to acquire financial products, such as new accounts and mortgages, than to do so by phone or online," she states.

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