Bank branches set to disappear as youth turn to mobile banking

Smartphone users across the developed world are increasingly turning to mobile banking and linking their satisfaction to ease of access and quality of service, as revealed by a research study conducted by Gemalto.

Through a poll conducted on 1,184 respondents from the UK, USA, Mexico, Brazil and Singapore, the study revealed that bank branches are disappearing at an alarming pace across the world, as customers are more prone to using their mobile phones for their banking needs.

A staggering 1487 bank branches were closed down in the United States in 2014, and in the UK, HSBC alone took out 47 branches with another 19 branches earmarked for closure this year.

The steep rise in online access has been the sole cause of such closures. Among the younger generation, 62 per cent customers use their smartphones and tablets for their banking needs. Over a quarter of the respondents interviewed stated that they have never visited their branch and that mobile banking is essential for their needs.

Social media also plays a major role in helping the youth to make choices on which banks and what services should they go for. Across the US and the UK, 17 per cent take help from the social media about the best banks and available services, 15 per cent on how others feel about their banks and 12 per cent use the social media to recommend their bank to other users.

Given the ease of access and large number of services available through mobile banking, customers are afforded many choices unlike in the past. Banks that do not offer mobile apps or adequate services are at a greater risk of losing their customers to rivals who offer these services. A staggering 37 per cent of respondents said that they would change their banks if mobile banking services were not up to their expectations. Over a million users switched their banks in the UK in 2014 alone, a rise of 20 per cent over the previous year.

While carrying a mobile phone two decades ago would raise a few eyebrows, not carrying one these days would make them twinge even more. Given the universal presence of smartphones and tablets, major banks not offering mobile banking services are well and truly digging their own graves.

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