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.
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About the authors
Sagnik Biswas
Paul Reynolds
Paul Reynolds leads Momentum, a division of ISG that provides research services to help service providers better target, win and retain business. Paul has 25 years of market research experience with specific expertise in methodology development, data analytics and research process design. Having found many service providers’ Advisor Relations functions to lack appropriate analytics, Paul is working to develop innovative new approaches that allow for data-driven programs based on the unique needs of each client. His approach benefits Advisor Relations, go-to-market functions, sales, strategy, marketing, and market/competitive intelligence teams.
