New Study: 58% Would Prefer Their Local Branch Close Rather than Face Increased Fees
A new study of over 1,400 consumers, from market research firm Chadwick Martin Bailey, suggests that when forced to choose, bank customers would prefer a further drive to a full-service bank or a teller-less bank, to fee hikes or service reductions. Once viewed as essential to banking convenience, proximity to a full service bank is the first thing consumers are willing to give up. Other notable findings from the study regarding bank location and convenience include:
The perceived importance of a physical bank branch doesn’t match up with consumer banking behavior: Teller-less options, particularly mobile and online banking services, have reduced the need for branch visits. Sixty-seven percent of bank customers say that having a physical branch close by is very important, but even 41% of these customers visit fewer than 5 times per year.
Banks don’t have to be steps away to be seen as convenient: The “sweet spot” for branch convenience is relatively wide. Bank customers within ten miles of their bank branches say they are the most satisfied with branch convenience.
The idea of a teller-less branch is confusing for some customers: Teller-less branches (where sales professionals are available to answer product and service questions in addition to automated services) were seen by customers as less desirable than closing their local branch altogether, this counter-intuitive finding suggests that the concept will require banks to fully explain the benefits of the teller-less branch.
“These findings reveal that some aspects of the banking relationship, we once perceived as critical, are shifting,” says Jim Garrity, Managing Director of Chadwick Martin Bailey’s Financial Services practice. “Banks must offer alternatives to full-service branches, lower transaction costs without diminishing product sales, and at the same time educate customers by effectively messaging and communicating how these changes will affect service and behavior.”
Banks that will be successful in shifting away from the local branch model are those that will provide alternatives to physical branches that satisfy bank customers’ desire for convenience and service, and can pass along the savings from reduced overhead to their customers.
About this Research
This study was done as part of Chadwick Martin Bailey’s self-funded CMB Consumer Pulse program. A report with additional findings from this study is available as a free download from Chadwick Martin Bailey. Data was collected from 1,433 U.S. residents, aged 18 to 75, via a nationally representative online survey questionnaire within the United States. The survey was conducted by Chadwick Martin Bailey in February of 2012.