Novantas: Setting Up a Bank Account is an In-Person Activity
“Folks are still hanging on to this comfort of feeling like there is a branch nearby if, and when, they need it.” That’s the summation from Novantas’ Matthew Sharp, who recently revealed that fully 60 percent of Americans, when planning to open a new checking account, would rather do so in person at a bank branch rather than doing so online.
The biggest reason behind this, Novantas’ study found, is that around half of bank customers studied in the US believe that online-only banks are “less legitimate” than those who merely offer online banking for physical branches.
Yet while bank customers clearly want bank branches, banks themselves are actually less than eager to offer branches. In the period between June 2016 and June 2017, banks have closed around 1,700 branches. That’s the single largest recorded decline ever, and features major names like Capital One Financial Corp, which closed almost one in three branches at 32 percent. SunTrust Banks Inc. shut down a little over one in five at 22 percent, and Regions Financial Corp. shuttered a hair over one in 10 at 12 percent.
However, with news that JPMorgan Chase is poised to open up as many as 400 new branches over the next five years, the branch may not be dead yet. Bank of America is likewise planning openings as well, at last report.
It comes down to a familiar theme: options. Online banking is great. Whether you’re checking your balance in the middle of the night after that horrible dream you had where you were dead broke, or you’re paying bills after hours and you either want to use the dedicated bill pay system or transfer money from savings to checking, online banking fills the bill. When things go wrong, however, people want the comfort of a bank branch to step in, fix problems, and make things right.
That’s the dichotomy banks work with today; it’s not the most profitable of pictures—keep branches open that may never do any actual profit-making business—but it’s one customers increasingly expect. Closing branches may be the smart move in short-term profit and loss, but those who close too hard may find customers fleeing for the physical.