The average number of people visiting bank branches each month has declined by 27.2 per cent from four years ago as mobile banking use has surged, according to new data from Roy Morgan.
The Single Source survey found, in the six months leading up to October this year, that there were 4.73 million people using branches in an average four week period, down 1.8 million from 6.5 million in 2014.
For mobile banking, around 44.7 per cent of bank customers, or 9.18 million used it in a four week period, up 62.2 per cent or 3.51 million from four years ago. In October 2014, 29.3 per cent of bank customers (5.66 million) used mobile banking in an average four week period.
Internet banking via a website remains the most popular banking channel at 47.1 per cent usage but has shown a decline from 52.3 per cent four years ago. Roy Morgan says it is likely that mobile banking will surpass it in a year or two.
Phone banking on the other hand is declining according to the study, down to 13.6 per cent from 16.1 per cent in 2014.
“The switch to mobile banking has been a result of rapid technological change, reinforced by high satisfaction levels with this relatively new way of dealing with banks,” Norman Morris, industry communications director at Roy Morgan said.
“Satisfaction with mobile banking is the highest of all banking channels with 89.2 per cent, compared to branches with 85.7 per cent and as a result it is likely to be contributing to the increasing preference for mobile banking.
“Declining use of phone banking is likely to be partly as a result of it having the lowest satisfaction rating of all the major channels with only 77.4 per cent.”
Nearly two thirds (63.4 per cent) of Millennials were found to use mobile banking, as opposed to 19.8 per cent using branches. This is well above usage for generation Z at 24.1 million or 26.3 per cent and generation X with 2.26 million, or 24.6 per cent.
However branches were said to still be preferred to mobile banking among older customers with 38.1 per cent of pre-boomers and 29.8 per baby boomers using them over an average four week period.
“The strong preference for mobile banking by Millennials is a result of them having grown up with technology, compared to the older generations who have been brought up only using branches,” Mr Morris added.
“As Millennials get older however, their financial needs are likely to become more complex and so they may also require some type of personal contact, possibly involving a branch.”
According to the study, the preference for mobile banking also increases with household income, reaching a high of 63.4 per cent for those with total income of $150,000 per annum or more. This is in contrast to 25.3 per cent where yearly household incomes are less than $40,000.
Despite the fact that the use of mobile banking rises rapidly with income, branches are still used by around a quarter (23 per cent) of consumers in households with yearly incomes of $60,000 or more.
“The idea that with increased complexity and incomes that there is still likely to be a role retained for branches is shown by the fact their use remains fairly consistent for all those with household incomes over $60,000 pa, despite their increased use of mobile banking,” Mr Morris said.
The study was based on face-to-face interviews with more than 50,000 consumers in their homes per year.
Anyone expecting an RBA rate cut to trigger a repeat of the six-year property boom we experienced from 2011 needs to think again, according ...
The Reserve Bank has warned of negative equity risks among off-the-plan property buyers and the broader economic consequences of a supply gl...
Australian asset managers will be aggressively buying yield assets as the US Federal Reserve has delayed further interest rate increases for...