As financial institutions grow their suite of online services, new research shows they shouldn't adopt a totally digital approach to banking.
As long as you can connect to the Internet, digital banking is a faster and easier way to perform daily banking tasks. With just a few clicks of your mouse - or taps of your finger - you can check in on bank accounts, pay bills, and even apply for financing from anywhere you get a signal.
Being able to manage your money from the comfort of your couch is just one reason why so many people are using online borrowing solutions instead of in-branch options.
But for every person who opts to shop for a personal loan or line of credit online, there's at least one more who prefers to go into a brick-and-mortar location to apply. And the ones that do may surprise you.
Many of the youngest customers prefer to make deposits, withdraw cash, and even pay bills in-person.
Seventy-two percent of Generation Z (or those who were born in 1997 or later) visit a branch at least once a month. This comes from new research out of Adobe Analytics. Their survey, which polled more than 1,000 U.S consumers, shows how different generations bank.
Who Sees the Value in Face-to-Face Services?
Look below to see how much of each generation visits a local branch every month.
Generation Z: 72%
Millennials: 60%
Generation X: 50%
Boomers: 55%
Traditionalists: 58%
Gen Z has a considerable lead on any other generation. Next in line are millennials, 60 percent of whom make a monthly visit.
Surprisingly, traditionalists (or those born before 1945) make a distant third. As for baby boomers and Gen X, physical branch visits make for a more divisive topic.
Adobe's findings amount to a role reversal in age stereotypes. Generation Z, the oldest of whom share a birthday with Google, grew up with having technology at their fingertips. They've become a generation known for having their eyes glued to a screen.
Their millennial siblings are only slightly better. Having come of age alongside many of the online services we take for granted today, they too have become associated with technology.
By all accounts, it should be these two tech-hungry age groups that turn their back on analog deposits and line of credit options. The irony is that it's older generations - your aging coworkers who call IT asking why their unplugged computer won't turn on - are adopting this role despite being that
While the branch may not be a frequent destination for these older demographics, it still forms the foundation of the banking experience for every age group.
Below shows how much of each generation agrees a physical branch is important.
Generation Z: 66%
Millennials: 68%
Generation X: 92%
Boomers: 83%
Traditionalists: 70%
What Are the Youngest Doing?
When they walk through the doors of their local branch, Gen Z and millennials mostly make deposits and pay bills. This is something they have in common with anyone who visits their financial institution, no matter their age.
Where they differ is in specialized services.
The youngest generations are more likely to get documents notarized and apply for personal loan or line of credit financing options than any other age group.
The Wave of Closures at Odds with Findings
In the last two years, a digital push has seen a sharp rise in U.S. financial institutions shuttering branches.
According to S&P Global, 1,947 branches closed across the country in 2018. While no such numbers exist yet for 2019, it's obvious some of the biggest names are continuing this trend.
U.S. Bancorp announced its plan to shutter up to 450 branches in the next few years, amounting to 10 to 15 percent of its total branches.
Research Cautions Total Switch to Digital
Personal interaction is still an essential part of the banking experience, so it's important financial institutions don't phase out face-to-face options entirely.
According to Deloitte's Global Digital Banking Survey, international trends show people all over the world prefer to open new checking accounts or start a line of credit at brick-and-mortar locations.
As a result, Deloitte consultants say financial institutions should strike a balance between physical and digital footprints in place of shuttering their branches. They recommend blending the human touch with technology.
In other words, they advise providing increasingly digital services with a high-touch interaction. An example of this would be a remote meeting with a financial advisor over the Internet.
Calling online would capitalize on the convenience of tech (that is, side-stepping the need to travel to the nearest branch), while still satisfying the need for face-to-face interactions.
Financial Institutions Shouldn't Digitize Everything
While so much of the world is going digital, the financial industry should think twice about turning its back on the analog world.
Millennials are the nation's largest living adult generation this year, and Gen Z is on track to outnumber the world's millennials within a year. With two of the biggest generations opting for highly personal, face-to-face banking options, there may be some value in keeping some branches open.
