Branch banking is still relevant, especially for the older generations. Branches typically offer deposits and withdrawals, loans and mortgages, financial advice, and safe deposit boxes. In contrast, digital banking offers convenience, online payments, transferring funds between accounts, checking account balances, and more. Although the digital banking world is easy to access, convenient, and preferred by most Gen Z customers, branches are still evolving. 

The Decline of Branch Banking

As stated, most branch banking customers are of the older generation, people who utilize safety deposit boxes, or customers who need a mortgage, loan, or financial advice. Aside from these factors, most people, especially the Gen Z generation, prefer digital banking. The main reasons for digital banking’s success are the rise of technology, economic factors, and the impact of the COVID-19 pandemic.  

The Rise of Digital Banking

Online access, mobile banking apps, and ATMs are critical features of digital banking that provide convenience. These factors offer convenience, accessibility, personalized experiences, and financial education tools that are available with one click. Customers can also travel to a local ATM to withdraw or deposit money without having to go to a branch and work with a human being. The banking industry continues to invest heavily in online and mobile banking delivery, setting an experience standard that can’t be met in most physical branches.

Gen Z Banking Behaviors

It’s no surprise that Gen Z customers prefer digital banking. They also live in a mobile-first world, use social media for financial information, and prefer contactless payments. Financial influencers on platforms like TikTok advise and educate the younger generations on banking, pushing them to continue using mobile-first options around the country. 

The Future of Banking: A Hybrid Approach

Although digital banking might be preferred, having branches to visit is still important. A hybrid approach combines the best of both worlds, providing access to an online banking world and an in-person banking experience. Branches support complex transactions, and digital allows for daily banking with a simple tap. 

With the rise of technology, digital banking has become a giant in the banking industry. Although physical branches still provide specific services that are needed today, it’s safe to say that there could be fewer branches as customers are successfully doing their banking using a digital platform. 

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