There was a time when personal banking meant making a trip to a local bank branch. When the World Wide Web was invented and banking became an electronic endeavor, the bank branch became the victim. Today, millions of Americans do their personal banking without ever visiting a bank branch other than when they set up their account, and there are those who don’t even need to go to a brick-and-mortar location to create an initial bank account.
Retirees, primarily those from the World War II and Baby Boomer generations, remember the task of visiting their money by going to the bank. For some, it was part of a weekly routine, and for some, it was a pleasant reminder of knowing there was a physical place where their money was safe and perhaps growing thanks to savings account interest or Certificates of Deposit.
Banking has clearly moved on, and most banking has moved out.
Spectrem’s upcoming study about finances, investing and technology looked at how investors are conducting the simplest of household financial activities, their everyday banking. Using Technology and Social Media in Financial Decisions asked investors to “describe your usage of online banking and branch banking” and the results indicate that while many retirees have made the conversion to electronic banking, there are still some who trek to the branch to fill out the slips and make their deposits or withdrawals.
More than half of retirees are playing both games when it comes to banking, utilizing a bank that has branches but also using online banking accounts. That is 10 percent higher than working investors, and shows that retirees are not yet ready to give up visiting the bank when they feel the need to do so.
The difference between retired and working investors is almost directly related to visiting branches. While 20 percent of retirees do all of their banking online even though they use a bank that has branches, 32 percent of working investors use only online services from a bank that has branches.
The main difference between visiting a branch and operating online is the human interaction angle, and retired investors are still appreciative of the opportunity to interact with the people at their bank branch. The value also comes from the opportunity to discuss banking matters with a human being, and banks need to promote that human element if they care about preserving the bank branch method for younger clients.
There are investors who do all of their banking at bank branches, including 21 percent of retired investors and 18 percent of working investors. That is a notable percentage and indicates that branch banking is not yet truly dead, although it may be on life-support.
Five percent of all investors, split evenly among both working and retired investors, do all of their banking online with a bank that does not offer bank branches, such as Ally Bank.
©2019 Spectrem Group
Keywords: technology, bank branches, retirees, retirement, investors, advisors, Spectrem