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People need people, not just apps

This headline struck me:

Barclays Bank branch to shut as only 15 people use it regularly

Reading the report, Barclays spokesperson is quoted as saying that “85% of customers at the branch are using alternative ways in which to undertake their banking, including via the telephone, online and mobile app” and that, “in total, [only] 15 regular customers use this branch for their banking”.

I’ve heard this a few times, where banks have branches used by 20 customers a day. That’s 3 customers an hour. It’s not worth it. I know people hate branches closing, but who needs them?

Oh! That’s the key question: who needs branches?

People worried about money. People disturbed about finance. People wanting to talk with a human. People who hate technology. People who don’t want an app.

In fact this report coincides with something that Jim Marous wrote the other day. He had picked up the new Plaid report about FinTech adoption. It’s an interesting report which shows the use of apps had exploded during the pandemic.

Between 2020 and 2021, the proportion of U.S. consumers using financial technology grew from 58% to 88%, approaching penetration parity with traditional banking and surpassing the use of social media.

Interestingly the Plaid report also gave an insight into the UK:

Plaid found that the average UK user now manages around 67% of their finances through a fintech product and is expecting to increase the number of apps and services they use from 2.8 to 3.5 over the next six months.

But I think the headlines miss the detail. The headline: customers can manage their money through an app. The detail: customers are nervous about money.

For example:

Americans face serious financial challenges: Three quarters live paycheck-to-paycheck. Four in ten can’t cover a $400 emergency expense without selling something or borrowing money. Only a quarter report being financially healthy. Consumers’ financial issues aren’t limited to dollars and cents, either. Money is consistently the number one source of stress for Americans, affecting consumers physically as well as psychologically. Now in the midst of the COVID-19 pandemic and economic crisis, consumers’ financial issues are more pressing than ever.

This nervousness is demanding more than just a transaction or a balance check. It demands the ability to talk to someone. And sure, yes, most of us might be happy to talk on the telephone but what if you are really in dire straits? What if you really need to talk to someone?

Money is closely aligned with mental health, and you don’t cure depression on an app. You deal with it face-to-face. So, for all those who believe branches are irrelevant, I would contend that the human interface is just as important as it ever was.  In fact, in today’s climate, maybe more so. People need people, not just apps.

About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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