Digital and online banking had been steadily on the rise in recent years, but the pandemic forced large-scale uptake, and it seems unlikely that many customers will ever go back to purely in-person banking. The rapid shift to web-based interactions has led many banks to conclude that traditional physical branches are losing their effectiveness and to close many bank branches.
Customers are finding it easier to adapt to digital transactions to fulfill most of their financial services’ needs. Half of consumers are using digital products more than they did before the COVID-19 crisis began, and 87% of them plan to continue to do so even after the pandemic recedes, further eroding branch transactional activity.
Nonetheless, the demise of bank branches is greatly exaggerated. Customers are overwhelming satisfied with digital banking for some services, but many still want an in-person experience, at least for complex or “financial lifestyle” services. One long-term role of branches will be to provide advice on complex financial products like mortgages, insurance and investing. In fact, a recent Celent report states that 77% of customers want a face-to-face conversation for a substantive discussion about their finances.
Read ISG’s 15-page whitepaper to learn how to reimagine your branch strategy for the future of banking.