Your bank would rather not see you.
It’s not that they don’t like you or appreciate your business. It’s just that your bank has been making it very attractive for you to never have to visit one of their branches again.
With online approval for new accounts, debit cards for both purchases and ATM access, and mobile applications that allow for payments, deposits, and balance inquiries, it is easy to understand why major banks have been closing branches by the thousands in recent years. The internet has changed the financial landscape: the majority of retail banking transactions can be completed without stepping foot into a neighborhood branch. The convenience that was once visiting the nearest branch to your home or office is now the ease of 24/7 access to your account via the internet.
On the surface, it’s easy to understand why branches are closing: traditional banks need to tighten their own financial belts. The past ten years has seen a financial sector implosion and a mobile technology explosion: after the financial crisis of 2008, banks cut their expenses by closing branches, letting go of employees, and in turn, gave customers the convenience of performing the majority of transactions at the “virtual branch” of their computer or smartphone.
But what if you are buying a used car and the seller will only accept a cashier’s check? What if you lose your ATM card and need a replacement that same day? And what if you would like to speak to someone in person when you are asking for advice about other financial products?
The fact is that brick and mortar bank branches offer services that mobile apps and 24/7 phone support cannot fully replace. Some banks are even slowing down their branch closures with the realization that while their customers are increasingly using the new mobile banking tools, physical branches serve as the best place for banks to advertise and offer additional services and products.
Cashier’s Checks
When you’re shopping at the supermarket, you whip out your debit card. When you shop online, you enter your credit card. And when you purchase an item off Craigslist, you may agree to pay via PayPal. But when a seller has never heard of Venmo and doesn’t want one of your personal checks, how do you complete your transaction?
Drawn from a bank’s funds instead of directly from your own account, cashier’s checks are a way of guaranteeing that the amount written on the check is immediately available to the payee. So if you shake hands on a purchase price of $7,200 for a used car and the seller says that they will only accept a cashier’s check, the buyer then visits their bank’s branch to purchase a cashier’s check with funds from their own account. The seller then receives a check that is guaranteed not to bounce.
Although internet-only banks offer them, their cashier’s checks must be ordered either online or over the phone and then mailed to the customer -- it’s not a same-day transaction. A person with an internet-only bank needing to make a purchase with a cashier’s check would need to tell their seller to wait until the check arrives.
For consumers considering an internet-only bank, this inconvenience of going a day or two without a cashier’s check may not be deal breaker. For others, considering a bank that has a convenient brick and mortar branch could be a significant factor, even if visiting one’s branch is done rarely.
Safety Deposit Boxes
Along with changing the way we shop and bank, the digital age has changed the way we store copies of our most valuable documents and information. With secure, digital files in the cloud, copies of important documents, tax returns, and forms of identification can be recovered almost anytime and anywhere in the event of an emergency. But even in this new internet era, there is still a role for the trusty safety deposit box.
Many banks offer customers a box to rent inside their vault, a highly secure safe on the bank’s premises, typically costing between $15 and $200 per year, depending on the size of the box. If you are not particularly comfortable with storing sensitive information in the cloud or would prefer not to keep a safe in your own home, then renting a safety deposit box to store everything from property titles, insurance documents, and family heirlooms can be a secure and affordable option.
Lost Bank Cards
If you ever have lost your ATM card, you know how frustrating it can be to be without the ability to have immediate access to one’s cash or to make a debit purchase. Customers calling their bank for a replacement card typically have to wait anywhere from 2 to 10 business days before a new card can be issued and mailed to them.
Consumers looking for a new bank should inquire whether same-day bank card replacement services are available at their local branch. Many banks today have the equipment to issue replacement cards on the spot -- a major relief for those whose card was lost or stolen.
With digital wallets and other pay-by-phone methods still not widely adopted, a branch with card replacement services is a welcome feature that not only minimizes a customer’s downtime from a lost ATM card, but is something that is unavailable from internet-only banks.
Personal Relationships
Although today’s banking customers prefer the convenience of their mobile devices and personal computers to complete routine banking transactions, many of those same customers still view a bank which offers a physical branch location as an important feature. Access to a physical branch, even if seldomly visited, gives the customer the opportunity to meet face-to-face with an actual representative to acquire information and answers about new banking products and services.
Customer support representatives on the phone or in a chat session can often answer a customer’s questions, but a local branch manager or banker can remember your name, learn about your financial goals, and provide the personal relationship that retail banking sometimes requires.
Customers who are considering long-term investments, personal loans, retirement accounts, and mortgages are also well-served by a bank with a local branch. These financial products are all enormous investments, and the average consumer benefits from having all their options explained to them by someone who has first-hand knowledge of their financial goals.
Bank Branches: Not Dead Yet
There are plenty of factors to consider when choosing a bank. Internet banks are giving the older, established brands in the financial sector real competition for new customers, offering low or no fees on many of the services that consumers are used to getting dinged for by the traditional banks.
With checking and savings accounts, CDs, home loans, and IRAs, online banks match nearly all the offerings of traditional banks, all while giving their customers the opportunity to earn more on their savings with higher interest rates.
But consumers must also factor the advantages of having a physical branch they can actually visit. From having access to basic banking products like cashier’s checks and safety deposit boxes, to opening up custodial accounts for children, the physical bank branch is not only far from extinct, but they are an integral part of the outreach for banks and credit unions.