“Increased governmental regulation, low interest rates, and an increasingly competitive marketplace have placed enormous pressure on banks to raise revenue from their existing customer base, while reducing the cost to serve their customers. Furthermore, the evolution of digital banking channels and the emergence of new customer segments, i.e., millennials, has impacted traditional methods of servicing customers and building relationships.”
Those were the summary findings of the J.D. Power 2016 U.S. Retail Banking Satisfaction Study. This study, the 11th of its kind, measured customer satisfaction around six aspects of consumer banking: account information; channel activities; facility; fees; problem resolution; and product offerings. “Channel activities” included ratings of six separate channels for customer interaction: ATMs; branch offices; call centers; IVR; mobile apps; and banks’ websites.
A striking new finding in this study was that mobile banking appears to have had a direct impact on overall satisfaction. Overall satisfaction ratings were 27 points higher on average for customers who use mobile banking than among those who do not. The gap was even wider for those customer who were highly satisfied with their mobile experience.
Despite the evolution and growth of mobile banking and payments, the demand for cash has remained study, and even has grown. Cash remains the most commonly used method of payment around the world, and 85% of Americans report that their use of cash has not dropped in recent years (according to a 2016 Mercator Advisory Group report.)
These findings are not as squarely at odds as they first seem. Customers are demanding more flexibility and convenience from their bank, and high mobile adoption means they are willing to process transactions through their devices, if the app is intuitive and secure. But many transactions still involve a physical transfer of goods for cash. This means that customers are looking for ways in which their banking apps can be extended to safely access ATMs for withdrawals.
So ATMs are not going to leave the banking landscape anytime soon. While many pundits are predicting that mobile will “disrupt” or “eclipse” ATM use, the data tell a different story. A 2014 study from Visa found that more than half of respondents (57%) claimed that ATM convenience was their primary reason for choosing a financial institution. For the remaining 43%, many said it was the close second.
The more likely scenario, then, is that mobile offerings and ATMs will merge in the future to create a part-digital, part-physical integrated network. Until that happens, there is a looming market opportunity to collect more fees and drive customer satisfaction even higher.