Online and mobile banking are essential elements in 21st-century financial services, but there’s more to banking than digital transactions.

Community banks and other brick-and-mortar institutions offer a full complement of services to meet the needs of a broad consumer base that is more diverse than the predominantly young and affluent customers of online-only institutions. While direct-bank customers rate their banks comparatively high, consumers and small businesses nevertheless continue to show a strong demand for the personal touch.

Despite the widespread adoption of digital banking, consumers remain financial services omnivores. A recent J.D. Power survey found that 71% of all bank customers visited a branch over the past year, 14 times on average. Even among the tech-savvy millennial generation, 71% visited a branch, with an average of 11 visits, compared with 49% who use mobile banking. And these visits make a positive difference, with overall satisfaction among those who visited a bank branch within the past year 27 index points higher than among those who didn’t.

Consumers continue to prefer branch visits to open an account, conduct major transactions, or get financial advice. The J.D. Power survey found that 78% of new accounts are opened in the branch. According to a separate Salesforce.com survey, 70% of respondents said nearby branches are important when selecting a retail bank, more than the proportion citing securing personal data and offering online services. A PricewaterhouseCoopers survey found that roughly half of respondents said they prefer in-person visits to open a new deposit account or apply for a new loan. And even millennials said they prefer face-to-face interactions to address budgeting and retirement planning.

In fact, many still prefer the human touch for routine business. A Fiserv study found 44% of consumers prefer traditional branches with tellers for their daily transactions, compared with 39% for online banking and 14% for mobile banking. Meanwhile, the growth in mobile usage appears to be slowing. A study from Bain & Co. found that consumers using their bank’s app surged from 32% to 52% between 2012 and 2015, but merely inched up last year, to 55%.

Meanwhile, high-touch borrowers such as small businesses continue to value the relationship-based model employed by community banks, which provide nearly half of small-business loans even though they hold less than 20% of banking industry assets. A survey from the 12 Federal Reserve banks found successful small-business applicants were more satisfied with community banks than any other type of lender. Community banks registered an 80% satisfaction score in the survey of borrowers, compared with just 46% for online lenders. And while just 5% of successful community bank borrowers were dissatisfied with their experience, online lenders had a dissatisfaction score of 19%.

With small businesses accounting for more than 60% of private-sector job creation over the past two decades—and with community banks serving as the only physical banking presence in nearly 20% of the 3,000 U.S. counties—in-person banking remains a core element of the U.S. economy. But while the human touch remains vital to many banking customers, the challenge for banks of all shapes and sizes is delivering high-quality service in all available channels. A recent Gallup poll found that while customers want the convenience of accessing multiple digital and physical channels, their personal satisfaction with how their banks deliver on these channels matters most.

So the challenge for the banking industry is not how to serve the small sector of consumers that prefers online-only banking. Rather, the task at hand is a balancing act of providing the full slate of in-person and digital banking services to a diverse consumer base—and doing it all well.

Terry J. Jorde

Terry J. Jorde

Terry J. Jorde is senior executive vice president and chief of staff of the Independent Community Bankers of America.

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