Brick-and-Mortar Banks Still Play Critical Role in Post-Pandemic America

From shopping to working to banking, COVID-19 has transformed the way Americans do business. And while the pandemic pushed more consumers online for day-to-day errands, brick-and-mortar branches still play a critical role in financial services and personal banking, according to a new survey by The Harris Poll on behalf of Ad Age. 

Brick-and-mortar is alive and well in banking and financial services

Despite restrictions on in-person interactions during the height of the pandemic, the majority of American consumers (76%) report visiting a financial services institution in-person during the pandemic, and most of these consumers (76%) say they’ve stopped by in-person in the past month. 

And, in a good indication of physical branches’ long-term viability, younger consumers were even more likely to have dropped into their local bank or credit union branch and less likely to conduct all or most of their personal banking online or digitally: 79% of millennials visited a brick-and-mortar FI branch during the pandemic, and 72% have done so in the past month. 

And 81% of Gen Zers report visiting a brick-and-mortar FI branch during the pandemic, and 63% have done so in the past month. 

Digital banking is a hit – but not the only path forward with younger consumers

While a majority (57%) of Americans conduct between 76% and 100% of their personal banking digitally, millennials and Gen Zers bucked the trend. Only 44% of Gen Zers say they bank online at this rate, and only 52% of millennials say they bank online at this rate. 

On average, Americans report doing about 70% of their banking online. Gen Zers, on average, do about 64% of their banking online. And millennials, on average, do about 69% of their banking online. 

And the unbanked and underbanked continue to represent a significant contingent of physical banking customers: a whopping one-fourth (25%) of Americans either do not have a mobile app for their financial institution or don’t use it at all. 

Financial services apps enjoy uptick with younger consumers – but not so much with low-income households 

Banking apps already enjoyed widespread usage, and for the most part, the pandemic did not increase frequency of use: Only 27% of Americans said they used their financial institutions’ mobile app more during the pandemic (41% said they used it about the same), and only 31% said they banked online more (i.e. via their FI’s website)

Although millennials and Gen Zers were the most likely to report increased usage, likely to temporarily supplement or replace the personal banking they typically do in-person (which they’re more likely to do). Thirty-nine percent of millennials and 36% of Gen Zers report using bankings apps more. And what’s more, 43% of millennials and 39% of Gen Zers report banking online more (i.e. via their FI’s website).

For various reasons – either because they’re unbanked, don’t have digital access, etc. – Americans living in households with income below $50,000 are much less likely to bank digitally: 40% report that none of their personal banking is done digitally compared to only 9% of households making $50,000 to $74,999 and 12% of households making $75,000 to $99,999 and households with incomes above $100,000. 

Mobile payments made some headway during the pandemic, especially with younger consumers and men. 

Thirty percent of Americans report using mobile payments more during the pandemic, and that number ratchets up for younger consumers. Forty-two percent of millennials and 40% of Gen Zers report using this option more during the pandemic. 

Men, too, are helping to usher in the new era of banking: 29% of men said they used mobile pay more during the pandemic, compared to only 17% of women. 

Methodology:

This survey was conducted online within the United States by The Harris Poll on behalf of Ad Age between May 24-25, 2021, among 1,022 U.S. adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online. For more information on methodology, please contact Dami Rosanwo.