Will The Power of Mobile Make Bank Branches Disappear?
By. Jim Marous
The high rate of mobile banking penetration at Chase Bank, Bank of America and recently introduced direct banks such as Simple, GoBank, Bluebird and Moven could provide a significant business advantage as digital channels tend to build loyalty and provide the opportunity to reduce costs through transaction migration.
A recent report from Bain & Company entitled, ‘Customer Loyalty in Retail Banking‘ found that mobile banking is more likely to increase a customer’s likelihood of recommending the bank than any other channel interaction and that features such as remote deposit and even the ability to check a balance impact loyalty. The research also found that once customers moved to mobile, roughly half stated they made fewer visits to the branch which can lower costs.
Digital Delight
As mobile banking use increases, banks have the opportunity to ‘delight’ customers with new applications and functionality. For instance, while remote deposit capture still represents just a small percentage of branch and ATM transactions (as shown by the size of the circles below), it is by far the most likely to ‘wow’ the customer (64%) and provide the opportunity to recommend the bank.
Interestingly, even routine mobile transactions such as checking a balance or transferring between accounts has a likelihood to delight (44%) and is a strong influence on loyalty according to the Bain study.
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