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November 06, 2015

Physical Banks Still Top of the Food Chain

A trip to the bank isn't what used to be, according to a new study by Market Force Information. While most users still take that trip to a physical building, an increasing number of users are turning to mobile apps to handle many common banking chores.

The Market Force Information study found that downloads of banking apps were up seven percent over the same time last year, and if a bank offers a mobile app, chances are good it's been downloaded by its customers. Seventy-two percent of consumers had downloaded a bank's mobile app if it was offered, and the increases represent all age groups in the bank's purview.

It won't come as much surprise to hear that the 18 – 24 year olds were the biggest adopters of such technology at 93 percent, but with almost half of users 65 and older turning to a bank's mobile app, it's clear that there's no discrimination here with age. Users most regularly turn to apps for simpler tasks, like checking balances and payment history, as well as transferring funds. Least used functions are withdrawing cash or applying for bank accounts.

Image via Shutterstock

Mobile apps for bank users are on the rise, but the more independent equivalent—the digital wallet—is still trying to find success in the field. Just 12 percent of respondents in the study were actually using digital wallet technology, and over half of respondents didn't even know what a digital wallet was. Among those who use such things, PayPal Mobile was top of the heap, but Apple Passbook was showing rapid growth in the field, possibly connecting to the growth of Apple Pay.

With most users still turning to the banks, the customer experience became particularly important. Sixty-three percent of respondents reported continuing to use a traditional brick-and-mortar outlet as a primary banking service provider, while 29 percent turned most often to a credit union or similar operation. Just three percent turned mainly to an e-bank for services.

Banking is changing. There's just no other way to put it. The changes are slow, certainly, and far from total, but we're seeing a change in the way people carry out banking operations. The earlier doomsaying about the bank teller's job being replaced by machines and mobile apps doesn't seem to be taking place, though, as bank customers still prefer that big brick building, that big steel vault, and that last line of defense against hackers and the unscrupulous—regular people—intervening on customers' behalf.  Other services are also on hand, the kind that can only be delivered by real people like advice about bank products for future investment.

It's possible that mobile apps and digital wallets will never replace the bank, but instead become a part of its operations. Things that facilitate after hours use and a greater customer experience are hard to turn down. The future of banking will likely look different from its present...but maybe not by that much.

Edited by Kyle Piscioniere

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