NEW YORK–New research suggests financial institutions should “think twice” before closing branches.
While the number of bank branches has shrunk by more than 3,000 since 2010, according to Deloitte, new research again finds many consumers, especially younger ones, still regularly rely on physical banks to make deposits, get paper money and even pay bills.
Seventy-two percent of Gen Z consumers visit a physical bank branch at least monthly, the highest of any age group, according to a study of 1,000 consumers by Adobe Analytics and reported by CNN Business. And 60% of Millennials say the same, the report added.
Surprisingly, older Americans were less likely to visit physical banks monthly, with Gen X (50%), Boomers (55%) and traditionalists (58%) saying they did so, CNN Business stated.
‘Death Greatly Exaggerated’
"The death of retail branches is greatly exaggerated," Nate Smith, group manager at Adobe Analytics, told CNN Business. "That personal interaction is still very, very important today."
Why are younger Americans going to bank branches? According to the Adobe Analytics’ research, 45% of Gen Z consumers said it was to make deposits, followed by paying bills (28%) and to get face-to-face service (25%). The Adobe research also said Gen Z and Millennials are going to the bank to get documents notarized and to apply for mortgages and other loans, CNN Business reported.
“The study found that all age groups agree that physical branches are an important part of the banking experience. Not surprisingly, that importance is most evident among older generations: 70% of Gen X, 83% of Boomers and 92% of traditionalists,” the report stated. “Still, two-thirds of Gen Z consumers and 68% of Millennials said physical branches are an important part of the banking experience, according to Adobe.
"It's important for banks not to overcorrect and not to forget that people like to interact face to face," Vivek Pandya, lead analyst at Adobe Digital Insights, told CNN Business.
Other Findings
Among other findings in the Adobe Digital Insights report, according to CNN Business:
- Many younger Americans don't seem ready to embrace online-only banks. Less than half of Gen Z (42%) and Millennials (49%) would consider online-only banks with no physical branches, Adobe found.
- Among those who have interacted with chat bots, the Adobe study found that two-thirds of Gen Z and 53% of Millennials found the bot experience to be better than interacting with a human representative.
- When asked about customer service needs, just 21% of Gen Z and 23% of Millennials prefer bots over humans.