Adults under 30 are less likely avoid bank branches than older consumers, and aren’t as interested in opening accounts online.
By Rob Rubin, Managing Director, Novantas
Statistics and technology innovation all point to the demise of bank branches. Teller transactions have been declining for years. People don’t have as many paper checks to deposit as they do in the past. And a large segment of bank and credit union customers –25% to 35% — only interacts with their bank via virtual channels.
Today, over 2 million retail locations in the U.S. enable people to pay with their smartphones, foretelling a day when paper money will seem as antiquated as VHS tapes and flip phones. Who needs bank branches when people can open accounts, deposit checks, manage their money, and pay bills from an array of electronic devices?
Young consumers — that’s who.
In a recent survey on FindABetterBank, adults under 30 were more likely to indicate that they don’t avoid bank branches, and they aren’t as interested in opening accounts online compared to older consumers.
Technology is not the reason. These young upstarts can have 1,000 browser windows open and still find the one they want with one click; they can walk, talk, and text at same time. Their affinity for branch banking isn’t a rejection of modern technology or a deep-rooted desire to go back to when life was simpler, and our cancelled checks were returned to us. It’s about financial literacy (or illiteracy). How many schools today teach kids how to balance checkbooks? Home economics went out the window with shop classes. Our nation’s current trend-du-jour of focusing on performance in standardized tests has eliminated teaching basic life-skills.
Many young adults don’t want to open accounts online because they aren’t sure what they need. They go into bank branches because people inside answer their questions. Unfortunately, for them the high cost of branch banking will win out — we’re already seeing a massive reduction in the number of bank branches in the US. The industry is rapidly moving towards a self-serve business model. How will we address the fact that our future customers will need more help than our current customers?