Over the last 20 years, internet banking has dramatically changed the industry forcing businesses to adapt to a new style of service. The market was shaken up when lean competition moved in with locationless services and remote access for consumers to their accounts.
While internet banking is becoming more popular and user-friendly, brick-and-mortar branches are not going anywhere. Physical banks are still the number one sales and engagement platform for consumers, as quoted in ABA Banking Journal. The reason that they're still operating and why they will be indefinitely is that you can't replace the human experience.
To survive this industry evolution, brick-and-mortar banks must understand who their customer base is and how to best serve them moving forward. For most banks, this means digitizing their current business strategy.
Maintaining physical branches is very important for serving key sectors of their customer base. The most popular in-person services are advisory services, investment management, private banking and issue resolution. Since these decisions require more planning and usually more risk on the consumer-end, they feel more comfortable banking with a representative over a website whom they cannot relate with. Baby boomers also prefer the physical branch since that's how they've always conducted their banking and their key factors being customer service, retirement planning and convenience.
While a portion of banking customers still use physical branches, banks need to adjust their operations to accommodate current traffic flow. A trend currently expanding across the industry is a switch to boutique style locations. Since they're no longer servicing 100% of their customers in-store, banks can cut costs by reducing their square footage and and number of staff at given times of the day. In 2013, almost 1,500 banks closed in the US alone, which was about 1.5% of the nations banks.
Another tool used to optimize brick-and-mortar locations are self-service ATMs. Until recently, they were limited to just withdrawals while now you're able to make deposits, check balances, pay bills and transfer between accounts without having to enter the bank at all. This allows the business to service more clients efficiently without any staff interaction. Consumers might feel more inclined to use this method of banking because they can visit a representative inside if any issue arises from their session. More consumers are using online bill payments and mobile banking than checks issued by banking clients. The younger generations tend to prefer digital technology since it's more intuitive to the generation.
Our technology helps banking institutions optimize their brick-and-mortar space by capturing consumer behavior insights in-store. Through the use of our pressurized floor sensors, we're able to measure behavioral movement to the exact step taken in the banking experience. This innovative data is able to understand what's happening in your space from the ground up, and can be used to predict trends in how consumers engage with your products and services.