ATLANTA Despite the hype around mobile, bricks and mortar still play a key role in financial consumer satisfaction and retention, according to a recent survey.
Indeed, branch closures result in customer/member losses, according to a Synergistics Research report entitled, “Branches in a Digital Age.” The study showed that in response to branch closures during the past year, 30% of those whose branch closed moved their accounts to another institution. In addition, 28% of branch users report they would switch financial institutions if their current branch closed.
Overall, 11% of Internet households say that a branch they regularly used closed in the past year. In addition to those who switched institutions due to a branch closure, 32% started to use a branch that was less convenient. More than one-quarter of those whose branch closed say it was probably a necessary action on the institution’s part to cut costs (27%), while a similar number just stopped using branches. One-quarter say the branch closure gave them a generally negative impression of the institution (25%), made them uneasy about the safety of their money (25%), or did not give it much thought (23%).
“In the current environment, depository institutions are struggling to balance the need for cost reductions with providing customers with quality service and offering financial advice and consultation,” said Genie Driskill, Synergistics COO. “At the center of this dilemma is the customer experience at the branch. For many consumers, the branch is the bank. Providers will need to carefully evaluate the cost savings of closing branches. As these results indicate, while many consumers will find some alternative method of coping with a branch closure, a sizeable number have or would switch providers in response. Providers planning to reduce their branch networks should anticipate a degree of customer loss.”