New technology is constantly being invented that provides uses for consumer businesses. The new technology is usually designed to make things easier and cheaper for both the business and its customers. However, sometimes it becomes easy for businesses to lose sight of how new technology is affecting its entire customer base.
The banking industry has had major technology enhancements over the last decade and especially within the last few years by the increasing amount of smart-phone users. This new technology ranges anywhere from telephone banking and basic online banking with e-statements, to smart-phones applications that feature remote deposit capture (allowing you to deposit a check from anywhere). There have been frequent mentions in articles lately questioning the future of brick and mortar branch locations. According to a study done by SNL Financial, the nation even saw a net loss of 1,118 branches last year (the highest since 2005, when they began tracking branch closures). These loses were attributed to banks needing to cut costs as well as the adoption of both online and mobile technology.
While this new technology is allowing banking customers to do more and more without actually stepping foot in a branch, it may still only be fully adopted by a portion of the population. A study conducted last year by the Federal Reserve found that 58 percent of mobile phone users have not yet adopted mobile banking because they felt their banking needs were met without the use of mobile banking and only 68 percent of those who had Internet access and a bank account indicated they used online banking in the past 12 months. This information shows that there is still a significant audience that has yet to adopt online or mobile banking.
Another aspect to consider is that while customers may adopt these technologies, their expectations for the traditional channels may still remain. The research that our company, Research & Marketing Strategies (RMS), has done has consistently shown that while customers use these new technologies, there a distinct value in a financial institution having an actual brick and mortar location available to customers. Even though some customers may rarely or never visit the branch, they see value in having the ability to communicate with the financial institution’s staff in-person, if necessary.
Customer research is going to be increasingly vital as businesses try to fit new technology into their operation models. New channels and technology can’t be viewed in vacuum and should be studied to determine its impact on the business model as a whole. While companies may need to force their customers to adopt new service features, it is always best to learn the best way to go about it ahead of time.
Adoption of new technology will most certainly continue to increase, however, one of my predictions for 2013 is that brick and mortar locations won’t be going anywhere for a while. People appreciate their existence, regardless of how often they use them. Additionally, I believe a certain portion of the population will continue to prefer in-person interactions (at least for the time being) as our market research with financial institutions has supported.
If you have any thoughts on this 2013 Banking Trend for January, please feel free to comment below!