Cash access has become a difficult element to manage for the government as digital alternatives emerged and coronavirus restricted physical movement. While many financial obligations can be handled online, the importance of having physical branches cannot be understated as pensioners are likely to suffer should they disappear from highstreets.
Fortunately, new research from Diebold Nixdorf, the banking solutions and technology systems company, highlighted that while physical branch visits did drop over the lockdown, customers are likely to return once rules are lifted, highlighting the importance of physical access.
According to their research, which had a sample size of 2060 adults, just over a third of bank customers did the majority of their banking in a physical branch before coronavirus emerged.
This eventually fell to 11 percent but according to their new findings, 28 percent of consumers are expected to head back to their banks following the lifting of restrictions.
The results highlighted bank customers seek both online and in-person services from their banks, with the following insight being shared:
18 percent visit banks to get analysis on different products
26 percent said they valued face-to-face advice
11 percent detailed they’d be unlikely to manage their banking without physical branches
35 percent said they will always want access to physical in-branch services in some capacity, with 10 percent saying they would never bank online
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Additionally, the University of Bristol in partnership with the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR), recently mapped out cash machine usage in the UK in a detailed report.
The university found that:
The number of free-to-use ATMs fell by almost a fifth (19 percent), a reduction of more than 10,000 machines, between March 2018 and March 2020
More free-to-use ATMs are available in deprived communities than pay-to-use ATMs, but there has been a 15 percent reduction in the number of free cash access points in the UK between March 2018 and March 2020
Cash is not so easily accessible closer to home and the distance consumers must travel to get it varies considerably depending on where they live. For example, London residents can access a source of cash within 326 metres on average while communities in Scotland, the South West, and Wales, typically have to travel more than 600m
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Despite the demand, additional research from Which? revealed bank branches have been closing in the UK at a rate of 55 every month.
In analysing these figures, Diebold Nixdorf worked out if closures continue at the current rate, customers could be without access by 2035.
Matt Phillips, the vice president and head of financial services at Diebold Nixdorf, commented on these findings: “The majority of banks have spent the last decade focusing on their digital strategies and investing in improving – or establishing – their online customer experience.
“In a world that is fast evolving and where the future is digital, there’s no doubt that high street banks must, and are, responding to the needs of highly digital customers.
“But not every customer requirement is digital and there is still an essential role for physical branches, as customers still want access to in-person advice and guidance around products and services.
“The challenge for banks is meeting the demands for digital growth and better online journeys, while maintaining access to branches and slowing the rate of closures, so customers have the flexibility to choose the best service for them at any given moment in time.
“Striking this balance between physical and digital is where the industry must come together to provide solutions – ensuring it responds to the evolving needs of its customer.”
Guy Shone, the CEO of Explain the Market, also reflected on the relationship between physical and digital banking.
As Guy explained, the relationship between the two is actually having an impact on the interest rates available to customers: “At a time when we’re craving face to face relationships more than ever before, there is huge value in being able to go into a bank branch to discuss the products and services available.
“This can’t be easily replicated digitally, and although it’s still possible to get market leading savings rates in branches, we’re seeing digital-only brands competing with high street banks and launching more competitive rates.
“If we take Marcus by Goldman Sachs as an example – it launched with 1.5 percent interest on its easy-access account in 2018, but was only available online.
“We may see more of this in the future as customers are encouraged online, but the benefits of face to face cannot be easily replicated and we cannot overlook the power of being able to discuss things with an expert in a branch.”
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