4 Changes to Bank Branches Brought on By Your Smartphone

NEW YORK (TheStreet) -- With 56% of U.S. adults owning a smartphone and another 35% of Americans 16 and older owning a tablet computer, according to data from the Pew Internet Project, the traditional bank branch system is bound to change.

In fact there's been a 50% rise in mobile banking use over the past year, according to Accenture and its Retail Banking Survey.

"There is little question that branches remain important in the minds of US consumers," says Mike Goodson, director of management consulting for Accenture's North America banking practice. "They are cited as the No. 1 reason for loyalty, and eight out of 10 consumers see themselves using branches as often or more often in five years' time."

Branches account for 60% of all bank products sold, and U.S. banks continue to spend $50 billion annually on their branch networks.

Yet Accenture says that over the past year, digital banking nearly became the No. 1 customer priority in terms of research and development for their banks, with only ATMs (21%) ahead of mobile banking (20%). It's only a matter of time before that dynamic changes for good as digital banking displaces ATMs and branches as the focus point for banking consumers.

"The rapid rise of mobile banking illustrates how quickly customer behaviors can change through digital technologies," Goodson says.

Accenture describes four specific ways bank branches are changing:

Lighter branches. Banks are building lighter branches that are more sales-oriented and rely on self-help technology to let consumers do their own banking and shop for products and services.

Out-of-bank units. Banks are also turning to kiosks in malls, grocery stores and transportation centers to "amp up" the ATM experience and enables customers to engage customer service reps remotely.

Vertical hubs. As banks scale down the size of newer branches, they're opting instead for full-service hubs that offer full sales and services and "specialized staffers" to help with mortgage and stock trading issues.

Geographic priorities. Banks aren't abandoning high-profile bank branches, just cutting back on them to focus on "strategically located flagships" that better tout the bank's full-service capabilities.

"Branches remain vital to banks, but they need to be reimagined as one aspect of a radically new approach to consumers," Goodson says. "This is not just an opportunity for banks to recover profitability and reduce costs. It is an opportunity to establish a much more sustainable relationship with customers and better retention of market share into the future."