While mobile banking has its perks, a new survey has found that 60 percent of Americans prefer opening a new checking account in-person at a bank branch.
According to Reuters, the survey, conducted by consulting firm Novantas, also found that half of U.S. customers feel that online-only banks are “less legitimate” than those with branches.
“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.
But just earlier this month, a report found that the mass exodus of consumers to various digital channels has pushed the closure of 1,700 branches in the 12 months ending in June 2017 – the largest one-year decline on record. From mid-2012 to mid-2017, Capital One Financial Corp. cut 32 percent of its branches, SunTrust Banks Inc. cut 22 percent and Regions Financial Corp. cut 12 percent.
Still, big banks like JPMorgan Chase and Bank of America are committing to opening new branch locations, specifically in new cities. Bank of America is expanding this year into Pittsburgh, while JPMorgan will open as many as 400 branches over five years into cities like Boston and Washington, D.C.
Sharp believes that more customers might open primary accounts online if banks could show that they can address problems remotely. Currently, most online-only bank customers are opening secondary savings accounts, not primary transaction accounts.
But with a growing number of Americans completing daily transactions through mobile apps and websites, Andrew Hovet, a director at Novantas, explains that JPMorgan and Bank of America can opt for smaller branches that are spaced further apart. In addition, they can boost their presence with more ATM kiosks and advertising, enabling the firms to gain 10 percent of new checking account customers in a market where they have only 5 percent of the branches.