Every bank or credit union wants to sign up customers like Harvey Watkins. The 83-year-old retiree joined a credit union when it first opened its doors in 1947 — and never left.
But the factors that brought and continue to bring Watkins and members of his generation into bank and credit union lobbies aren’t so critical anymore. Yes, convenient branches, a broad array of products, competitive rates and in-person service still matter, especially when first attracting people.
These days, however, online checking, direct deposit, automatic bill-paying and other electronic services constitute the mortar that increasingly is keeping a growing number of clients cemented to their institutions.
“Debit and Internet banking really seal the deal,” said Terence Roche, a principal at bank-consulting firm Cornerstone Advisors. “Once you’re doing bill-paying online [with a particular financial institution], it’s really hard to leave.”
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Branches aren’t going the way of the dinosaur anytime soon. For example, a number of community banks added nearly 28 percent more offices, primarily branches, from 2001 to 2006, with much of that expansion mirroring population growth.
Yet more customers, especially younger ones, are interested in online banking and less likely to visit branches, according to industry reports. Wireless and mobile-phone access promise to take it all one step further.
For example, Bank of America this month completed the rollout of nationwide mobile banking that opens up a range of services to people with cell phones and Internet ties. Customers can check deposit and loan balances, pay bills, transfer money between accounts and view transactions without visiting a branch or sitting in front of a computer terminal.
“We’ve created a pocket-sized bank that can be taken anywhere,” said Sanjay Gupta, an e-commerce official at Bank of America.
Electronic banking offers other benefits, too. If all Americans viewed and paid bills online, it would greatly curb landfill waste and greenhouse gases while preserving an estimated 18.5 million trees annually, according to the National Arbor Day Foundation and CheckFree, a firm that provides electronic commerce services.
Financial institutions probably could sign up even more customers if they offered greater security assurances for Web customers.
A March study by Javelin Strategy & Research and TriCipher Inc., an identity-authentication firm, found that financial institutions would add millions of online customers if they provided downloadable identity-protection software.
But consumers still are more likely to fall victim to financial crimes from stolen mail and lost or stolen wallets, debit/credit cards and checkbooks, Javelin President James Van Dyke said recently in Scottsdale.
