I was talking with a friend who knows that I work in banking. My friend said to me, “I think my bank is going to close.” I asked him why, and he said, “Because there are never any cars in the parking lot.” I responded that many financial institutions are experiencing reduced foot traffic, but that doesn’t necessarily mean the institution is going to close. In fact, it could be the opposite.
I’ve discussed the trend of reduced foot traffic with many bankers. Some are reducing the size of their teller line, and many have said that the ATM has more traffic than the drive-up. Customers, especially the younger generations, are doing most of their banking online and through electronic/automatic payments and deposits. When not online, many choose to use the 24-hour access of the ATM machine, which is sometimes faster and more efficient than a person at the teller window.
Some institutions are offering checking accounts that don’t have any checks. The old-school person in me wonders, how can that be? However, think about it! What is your reaction when you receive a paper check? Maybe nothing if you work at a financial institution, but many folks think (or used to think), “Ugh, now I have to run an errand.” No one I know likes running errands. Errands take time away from other things I’d rather be doing. Enter scene: Remote deposit capture for consumers. This trend in banking is image capture and deposit using a mobile device and the institution’s mobile application. This removes the need for an errand, gives consumers 24-hour access to their bank from their location, and is really an enhancement to online banking capabilities. Some bankers have found ways to mitigate risks associated with consumer image capture, and it has resulted in less loss than with checks received in person!
With consumer demand pushing institutions toward increased digital services (for deposits and for loans), it really enables institutions to maintain their relationships with consumers even if the consumers move away. The institutions’ need for physical locations is becoming less important as we move toward a digital world. Foot traffic won’t necessarily mean anything, but the importance of customer relationships and service will be a key factor in an institution’s success. And good news for customers: fewer errands and great service!
If you need help related to the risk of mobile banking (or the risk of not implementing it), contact your Wipfli client representative.