Banks Shouldn't Close Branches as They Expand Online, Study Says
NEW YORK (MainStreet) -- What do consumers from Boston to Bangladesh want from their banks?
In a word -- actually two -- "personalized service."
That's the key takeaway from a new study from Cisco(CSQ) , the San Jose, Calif.-based software giant.
Cisco's IBSG Omnichannel Banking Study of 5,300 global banking consumers shows consumers still value "face-to-face" encounters with bank staffers, and many are likely to walk away from a bank that closed its brick-and-mortar shops and operated strictly online.
The study says 26% of consumers would take a hike if banks eliminated "personal attention" from their menu of services, and 65% say they would favor more bank branches that offered a wider menu of services, including tax help, accounting services and legal services.
Cisco calls such a financial institution "omnichannel banking" and says it's the future of financial services.
"Banking is transforming rapidly, driven by changes in regulations, macroeconomic pressures, new customer demands, technology advancements and increased competition," says Jorgen Ericsson, vice president of the global financial services practice for Cisco Internet Business Solutions Group. " A fundamentally new approach to banking is needed, with an emphasis on a combination of both improving customer experience and simultaneously reducing costs. Our study shows that customers are ready for a new era, and the solution will be omnichannel banking."
Some other interesting takeaways from the Cisco banking study include:
Mix-and-match is common: Just because a consumer may use virtual banking services doesn't mean they won't walk into a branch. The study says that 30% of "frequent users" of mobile and online banking visit a bank branch at least twice per month."
All or none: Cisco says 45% of respondents say that if a bank limited or curbed onsite, personal service, they would stay away and strictly use a "total virtual banking alternative."
Web choices: 78% of respondents in developed countries and 72% of consumers in emerging markets prefer to use online banking to pay bills and check account balances.