Blog // Connect Ohio
Don’t Bank On It
Fifth Third Bancorp, a Cincinnati-based bank, is cutting one hundred branch offices in response to the demand for mobile and online banking trends. Although Fifth Third has not yet specified which branches will be shut down, in a recent article by Columbus Business First, CEO of Fifth Third Bancorp, Kevin Kabat explained that the decision to close these branches was because a new type of consumer has emerged – one highly reliant on digital access to services and less dependent on the brick and mortar bank resource.
“Consumer demographics and our customers’ preferred channels of banking are undergoing significant changes,” said Kabat. “Meeting the evolving preferences of how our customers interact with us is our top priority. Over the past several years, we have made significant improvements to our mobile banking options and our sales and staffing models, and we plan to tailor our branch network in concert with these changes.”
Fifth Third is facing the same scenario as many other banks in which customers are increasingly transitioning previously in-person activities online, via mobile phones, or at an ATM. In addition, access to new payment methods, such as Apple Pay, have led banks around the world to focus on improving their online banking platforms. For example, some banks have included emojis for password protection use, and many banks offer free mobile deposits in which a customer can simply take a picture of a check and deposit it without stepping foot in a branch.
In a recent article from Cleveland.com, banking analyst, Terry McEvoy of Stephens Inc., reported that deposits handled by tellers in branches have dropped 10 percent in the last fifteen months while mobile deposits have increased 75 percent (now accounting for 14 percent of the bank’s deposits).
Surveys at the close of Connect Ohio’s Every Citizen Online (ECO) program showed that 28 percent of participants expected to use broadband services to conduct banking online post-training. Yet, some remained concerned regarding the safety and privacy of their financial information online. A recent blog from Connected Nation examines the problem of online hacking and provides steps regarding what to look for and how to prevent attacks. The Federal Deposit Insurance Corporation (FDIC) has also provided access to materials including brochures and web campaigns regarding online banking.
Banking is just one of countless industries affected by the transition of digital services on traditionally in-person exchanges – and for now, the two platforms will co-exist with a few less branches. What are some examples of this you have seen in your community or workplace?