NEW YORK Nov 12 U.S. bank customers are quickly
turning to mobile devices and computers to deposit checks and
borrow money for cars and houses even as they say banks should
keep branch offices open, according to a new study.
Some 32 percent of U.S. bank customers use mobile banking at
least once a month, half-again as many as last year, consulting
firm Accenture said in a survey released on Tuesday. Of those
who took out a car loan, 21 percent did so online, double the
portion the year before. Twenty-five percent went online for a
home mortgage, up from 15 percent.
The shifts came even as almost four out of five people said
they will visit bank branch offices just as frequently, if not
more so, five years from now.
Branch closings would be inconvenient, two-thirds said. Half
said they would switch banks because of a branch closing.
Having people want more digital banking and branches too,
means trouble for bank executives, said Michael Goodson, an
Accenture managing director for financial services.
"There is a risk of moving too slowly and a risk of moving
too quickly, in terms of alienating customers," Goodson said.
Accenture found that customers feel little loyalty to banks and
would likely switch to a more appealing competitor if they
thought the change would not be difficult.
Branch real estate and staff cost the top 25 U.S. banks
about $50 billion a year, more than information technology, call
centers or other operating expenses, according to Accenture.
Processing deposits digitally can cost 95 percent less than
using human tellers.
Gordon Smith, chief executive for consumer banking at
JPMorgan Chase & Co, said at an investor conference last
week that the company is adding about 100 branches a year to its
network of 5,652, up 7 percent from 2010 and second in size only
to Wells Fargo & Co's 6,217 locations. Branches continue
to attract customers and deposits, Smith said.
Still, JPMorgan's pace of building is one-third its former
rate and the new branches are smaller and have 20 percent fewer
employees. Bank of America has reduced its count by 10
percent since 2010 to 5,243.
Full-service banks could lose as much as 35 percent of their
market share to more digitally-adept peers and newcomers by
2020, said Wayne Busch, head of Accenture's banking practice in
The companies that take customers, Busch said, could include
banks that are online only and retailers that partner with
financial institutions. An example of that type of venture
happened when Wal-Mart Stores Inc teamed up with
American Express Co to offer a prepaid debit card in
lieu of checking accounts.