Even while technology continues to transform the financial services industry—and multichannel banking continues to grow in importance—the bank branch location remains a dominant factor in choosing one’s primary bank, according to The Financial Services Market: Affluent and High Net Worth Consumers, 8th Edition, a recent report by leading market research firm Packaged Facts.
Survey data published in the report reveals that in 2018, 57% of bank users cited branch location as a reason for choosing their primary bank, a response rate that has barely budged since 2014 and remains almost twice the percentage citing runner-up rates/fees. Down the list, a relatively meager 10% cited internet services as a reason.
The report also found that household income has little impact on consumers’ common rationales for choosing their primary banking institution. Affluent bank users with $250K+ household income are about as likely as <$50K HH income bank users to cite branch location as the predominant rationale, and they are only slightly more likely to cite rates/fees as their second most prevalent rationale.
In addition, among affluent bank users, generation plays a significant role in shaping rationales for choosing a primary bank. Branch location becomes more predominant among Baby Boomers, who by habit may be more inclined to bank in person; while Millennials are more likely to rely on word-of-mouth recommendations.
So the question remains: Which banks are most favored by consumers? Packaged Facts found that in 2018, almost 12% of consumers reported using Bank of America as their primary bank, a higher percentage any other bank and slightly ahead of Wells Fargo and Chase. Usage of these three banks towers above other top banks. Since 2014, Chase’s usage penetration rose 17%, while rising only 6% at Wells Fargo and declining slightly at Bank of America. However, consumers are more likely to use credit unions than any single bank, underscoring these generally fee-friendly financial institutions’ appeal.
Affluent consumers with $250K+ household incomes are most likely to favor Bank of America as their primary bank. Meanwhile, among banks with national footprints, Chase is the most likely to draw affluent Millennial and Gen Z customers (adults age 18-37) living in household with incomes of $150K+ household income. Conversely, Wells Fargo draws a disproportionate percentage of Gen Xers.