Retail Banking

Delivered March 22nd, 2018. Contributors: Niveditha R., Michelle R., Kirsten G., Thorton S., Jessica G., Shannon R., Regina I. and

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Retail Banking US - Trends in Deposits

Trends shown in deposits with respect to retail banking in the United States are that customers are more likely to make deposits through ATMs and mobile banking, while over-the-counter deposits will continue to decline. Banks continue to reduce their branches, cutting real estate costs, while gaining increased deposits by way of non-cash payments. While the frequency of deposits made using debit cards is higher, the value of deposits made by credit cards is greater. Below, you will find a deep-dive of our findings and the methodology used to arrive at them.

While we have found accurate data and information to analyze trends in deposits with respect to retail banking in the US from 2007 to 2017, there were no reliable sources available for the year 2018. The Federal Reserve Payments Study- a triennial study by the Federal Reserve System, last released a report in 2016 with statistics and estimates to show the growth rate of trends we have observed in the last 10 years with respect to deposits, indicating that the trends are set to continue and hold true for the current year as well.
RETAIL BANKING AND CHANNELS FOR DEPOSITSRetail banking- also known as personal banking is the division of a bank that deals directly with their retail customers. Branches of banks facilitate retail banking.

Deposits are made in any of the 3 ways: 
-Over-the-counter(through a Teller)
-Through an ATM
-Mobile Banking (for online transactions) 

Over-the-counter transactions involving Tellers has been declining steadily, as the number of bank branches has been decreasing, with 97,000 branches in 2007 having reduced to 90,000 in 2017 mainly due to banking companies in the United States making efforts to tighten operating costs after the recession. An estimated $8.3 billion can be saved by banks annually in direct real estate costs alone by facilitating online transactions.

The decline in over-the-counter deposits can also be attributed to costs involved in making deposits, with mobile deposits currently being cheapest at $0.08, ATM deposits costing $0.8 and over-the-counter deposits being most expensive at $8 per deposit.

Corresponding to the trend of more customers embracing mobile banking owing to reduced cost for deposits, total deposits in retail banking have also been increasing steadily from about 6-7 trillion USD in 2007, to an estimated 9 trillion USD in 2012 to 11.3 trillion USD in 2016, which marked a 70% increase in deposits.
THE SIZE OF DEPOSITSThe exact amounts corresponding to domestic deposits in retail banking for those years were found to be $11,150,570,345,000 in 2017, $8,641,916,965,000 in 2012 and $5,811,799,951,000 in 2007.

This marked increase in deposits over the years is also attributed to Americans holding about $2 trillion in checking accounts currently, with their "love (for) liquidity".  The average checking account deposit in the United States as of 2017 is about $3,600, climbing up from $1,000 in 2007.
THE SHIFT TO ATMs AND MOBILE BANKINGIn 2007, in a retail banking and deposits statistics report, half of the bank offices at the time the sample was drawn issued 70 million debit cards and 57.7 million credit cards. Doubling those numbers to estimate the number of cards issued by all the banks offices at that time, we arrive at the estimates of about 140 million debit cards and 115.4 million credit cards. 

Moving forward to 2012, of 776 million active general purpose cards, 334 million were credit cards, 283 million were debit cards, and 159 million were prepaid cards. It is noteworthy that there were more credit cards active than debit cards then.

In the same year, despite the growth of ATMs, 59% of the total value of cash deposits were made via over-the-counter transactions compared to 41% made through ATMs. However, at that time, the frequency of cash deposits made through ATMs was higher than those made through bank branches and cash vaults.

As of 2016, mobile banking has gained traction, with 94% of consumers surveyed having checked an account balance or information regarding their recent transactions using mobile phones, 58% having transferred money between bank accounts electronically using mobile phones, and 48% having deposited a check in an account electronically using their mobile phone's camera. 

Also, total non-cash payments including deposits made using debit and credit cards continue to rise at an annual rate of 5.3%, with $3.16 trillion worth of payments made using credit cards compared to $2.56 trillion made using debit cards as of 2015. However, in terms of frequency, the number of debit card payments (including payments with prepaid and non-prepaid cards) were higher with 69.5 billion payments in 2015 as compared to 33.8 billion by credit cards. The above-mentioned data was made available in December 2016 by the Federal Reserve Payments Study 2016, and with total non-cash payments set to increase at an annual rate of 5.3%, the same continues to hold good for trends in retail bank deposits today.
CONCLUSIONTo sum it up, the general trends observed are that consumers are more likely to make deposits through ATMs and mobile banking, while over-the-counter deposits will continue to decline. While the frequency of deposits made using debit cards is higher, the value of deposits made by credit cards is greater. Banks also save more annually in real estate costs while continuing to gain increased deposits.

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Retail Banking US - Challenges

Overview:Our research team has identified a number of challenges facing retail banking. These challenges include easy access to online banking and in-person customer services, resolving various customer complaints, addressing socioeconomic factors that could have an impact on banks and customers alike, and the struggle of keeping up-to-date with changing regulations.
Challenge 1: Access to modern services An increasing number of customers are using mobile banking. Customers are now more interested in finding what they're looking in the quickest and easiest ways possible, and they've become more open to the idea of fully automated services so that their needs can be met quickly and sufficiently. The challenge of ensuring their customers have access to mobile banking is a modern one, but becoming increasingly important.

Despite the growing demand for online banking, access to in-person customer care still matters. Nearly two-thirds of consumers still prefer human interaction over automated services, and customers continue to find it essential to be able to ask a real person questions regarding their banking and financial decisions. There's an increasing need for banks to personally assist in important financial decisions by providing helpful information based on their customer's location data, price range, and other personal data.  

A recent study showed that 71% of all bankers visited a branch over the past year. Furthermore, the study concluded that 78% of banking accounts are opened in person at a branch, and customers that visited a bank branch were more satisfied with their banking experience than those who did not visit a bank branch in person. The challenge is providing access to good online services while maintaining satisfactory in-person customer care.
Challenge 2: Customer ComplaintsA common complaint among bankers is that they've experienced terrible customer service, as well as terrible branch services when visiting their bank in person. Another complaint is that many banks do not show any kind of loyalty towards their customer base. Hidden fees, checks bouncing, expensive debits charged first, mortgage and loan issues, errors and clerical mistakes, and banks failing to honor their promises are some of the most common issues customers have with their banks. An average of 29% of people say they would change their banks if it were easier to do so. 

 Millennials will switch their banks more often than any other type of customer. The reason most often provided is that they are dissatisfied with the customer loyalty displayed by their bank, but studies show that younger customers have a difficult time addressing the problems they're facing. When the issues they're having continue to go unresolved, they'll terminate their account and move on to a different bank.
Challenge 3: Socioeconomic IssuesThe Federal Reserve increased interest rates in 2017, and they will once again increase interest rates in 2018. As a result, customers have needed to tighten their budgets and decrease spending. The challenge banks now have to address is that they have to entice customers by having a variety of compelling product offers available, they need to deliver satisfactory digital experiences to their customers, and they need to maintain high-quality customer service by providing both automated services and human services.
Challenge 4: The Difficulty of Regulatory Compliance Banks continue to struggle with keeping ahead of the challenges brought upon them by growing and changing financial regulations. Banks have a difficult time combining regulatory compliance with their regular operations. The unstable political climate in the U.S. has further complicated regulatory compliance.
Conclusion:A number of challenges exist for retail banking. These issues include providing easy accessibility to both online and personal services, keeping their customer base satisfied in order to decrease the risk of losing unhappy customers to competitors, having compelling product offers available to combat socioeconomic issues their customers may currently be facing, and keeping ahead of complicated financial regulations that are frequently shifting and changing. 

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Retail Banking US - Investments to Grow the Business

Our research indicates that the top three investment priorities for banks in the U.S. are regulatory compliance, enhancing customer service and implementing new technology. Banking could soon revert to pre-crisis returns on equity, which may have a deep impact the investment strategies of larger banks. Below we will take a closer look at the current atmosphere in the retail banking world, as well as some of the trends in top U.S. banks.

CURRENT ATMOSPHERE IN RETAIL BANKING
In a report on the future of retail banking, PWC finds that the top three investment priorities for U.S. Banks wishing to continue growth through 2020 include regulatory compliance, enhancing customer service and implementing new technology.  The report also relates that while 28% of respondents in their poll feel that innovation in the banking sector is important, only 7% feel very prepared for open innovation. 
 
A report by Accenture indicates that with regulatory relief, reductions in corporate tax rates and rising interest rates, U.S. banks could soon be back to pre-crisis returns on equity. In 2018, we may see the result of this in terms of larger U.S. banks competitively engaging in investment in a way that’s not been seen in a decade.

JP MORGAN CHASE
In January 2018, JP Morgan Chase announced a $20 billion, five-year comprehensive investment plan. This investment plan will focus on the following key areas: investing in employees in terms of wage increases (on average 10%), expanding their branch network into new U.S. markets – leading to increased small business lending and philanthropic investments, and continued support for low to moderate income families.

 Community-based philanthropic investments will be increased by 40% to $1.75 billion over a period of five years. Small business lending will be increased by $4 billion. Affordable housing lending will be accelerated by increasing mortgage lending in low and moderate-income communities and by accelerating commercial lending to build affordable housing.

BANK OF AMERICA 
 Bank of America has recently made automated retail banking an investment priority. The bank reported that until 2012, 65% of customer deposits were made at the teller window and 35% percent were made at that ATM. By the year 2017, these figures had changed dramatically, with 50% of customer deposits made at the ATM, 20% made on mobile devices and 35% made at the teller window.  

According to Charles Liu, Bank of America's chief of branch transformation, ATM innovation and market strategy, although retail centers are still an important source of revenue and new customers for most financial institutions, their relevance for everyday transactions has been on the decline for years. To adapt to these changes, Bank of America began testing automated retail centers. Each automated branch is equipped with an ATM, as well as one or more videoconference rooms where customers can engage in online meetings with mortgage loan officers and other specialists. The bank also plans on replacing each of it’s 16,000 ATM machines with state-of-the-art technology.

GOLDMAN SACHS
In a 2017 article, Forbes reports that Goldman Sachs has focused its investment efforts on acquiring a larger share of the U.S. deposit market by increasing savings rates from 1.05% to 1.2%, and the increased savings rate in of itself acts as commercial for the bank, attracting savvy retail customers. The rate increase is actually due in part to mounting pressure from the Federal Reserve to rely more on deposits, rather than volatile short-term funding options to cover overall operations.   

One way that Goldman Sachs is able to offer the higher savings rates is by offering loans designed to pay off credit card debt, which then results in a higher interest yield on their loan portfolio.

WELLS FARGO
Per the company’s 2017 fourth quarter report, Wells Fargo’s top investment priorities are focused on retail banking, including mortgages, home loans, debit card issuance, private student and auto loans, as well as small business lending.  

However, according to a Forbes article, an enforcement order was passed on Wells Fargo by the Federal Reserve in February of 2018 which essentially prohibits the bank from further growth until internal governance issues are resolved. What this means for Wells Fargo is that they must sell off some of their assets to make room for core loans and deposits.  The bank will reportedly reduce trading assets and short-term investment securities in its portfolio. Wells Fargo is also reportedly selling its auto finance business.

CONCLUSION
As seen above, investment priorities for top U.S. banks include a focus on state-of-the-art technology, an increased presence in the U.S. deposits market, mortgage lending in affordable housing, small business lending and private student and auto loans.

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Retail Banking US - Platform Changes

After extensive research, we found that the product offerings of banks that are changing the most are greatly influenced by trends such as cardless ATMs capable of performing 90 percent of the tasks tellers currently do; simpler, lighter, and more mobile-focused designs and user interfaces of websites and apps. Other trends that have started impacting product offerings of banks include the increased adoption of voice technologies in both the digital space and in branches, a more video-centric approach to social media and the increased use of Twitter, a growing utilization of dark posts, banks trending toward cloud-based data storage, and open banking regulations for third-party websites, companies, and apps.

All product offering changes and industry trends enumerated within this write-up were chosen based on how often they were recurring and are featured in the latest findings of credible research centers and resources such as The Financial Brand, Forbes sources, and Business Insider press releases.
AUTOMATIC TELLER MACHINES
CARDLESS
According to an article published by ATM Marketplace, well-established banks in the US such as Wells Fargo have been rolling out ATMs that do not need a card to be operated. The article states that the banking industry giant has deployed over 13,000 ATMs around the country that support this technology. In addition to this, the company also plans on incorporating “tap and pay” technologies into their ATMs. This trend is primarily driven by its benefits in terms of security such as the elimination of card trapping and skimming threats.

FRONT-FACING TRANSACTIONS
 Business Insider states that soon, customers will prefer ATMs more even for other front-facing transactions aside from withdrawing and deposit such as check cashing. Data shows that currently, around 60 percent of transactions normally performed by tellers can be completed via an ATM. Experts anticipate that by 2018, this figure will rise to 90 percent.
BRANCHES
CLOUD
The article by Forbes also states that banks in the US are currently trending toward diverting their transaction records to the cloud instead of maintaining their own network. Findings indicate that by 2020, the amount of computer power diverted to the cloud will exceed the computing power allocated for private data centers. In addition to data analysis and storage, customer engagement was found to also be trending towards the cloud.

FEWER BRANCHES
The article also states that the number of bank branches globally is forecast to decrease by around 4-5 percent per year. This trend is primarily driven by the migration and preference toward the digital space.

REPLACED BY COMPUTERS
According to an article published by Business Insider, front-desk tellers in retail banks will soon be replaced with digital interfaces or ATMs. CEO of Consumer and Community Banking at JP Morgan Chase Gordon Smith states that banks have started decreasing in size as more technologies and innovations move to the front of branches.
WEBSITES & MOBILE
MOBILE DOMINANCE
According to owner of InnovoMarketing Lori Philo Cook, the customer experience of banking in 2018 will revolve greatly around mobile banking. It was stated that this trend will shift the priorities of most banks, focusing more on mobile banking options that both improve on functionality and remove friction. This is supported by previous findings which state that as early as 2016, mobile has started dominating digital channels. As a result of this transition to mobile, banks have begun designing their websites and user interfaces to be omni-channel compatible, adopting their designs to suit new technologies as well such as VR, wearables, and other IoT applications.

DESIGN
In terms of design, websites and user interfaces have been shifting towards the simpler and lighter side. This trend is driven by a preference of customer for more clear, intuitive, and obvious designs. Overall, banks have started focusing on websites and user interfaces that are more efficient and effective to navigate.

VOICE
According to an article published by Bank Innovation, banks have also started bypassing the need to navigate through visuals entirely. This is accomplished through the implementation of current-generation voice assistants. Through voice, users may choose to communicate what they want to achieve casually while a computer uses AI or Machine Learning to provide exactly what is needed. Due to the variety of uses of voice technology, this trend is evident in both the digital space and even in retail locations.

SOCIAL MEDIA
According to research published by the Financial Brand, banks are now publishing 44 percent less content on social media. This is most evident in Facebook, where previous findings show that banks used to post at least 60 posts on the platform on average within a quarter. Currently, this figure is down to just 18. Findings indicate that banks have started posting less in terms of quantity, but more in terms of quality. According to Unmetric Co-Founder and CEO Lakshmanan Narayan banks used to think of social media platforms as a “soapbox to share everything and anything.” He stated that social media posts from banks are now more well planned and strategized.

TEXT VS VIDEO
Research also shows that the media format of content published by banks in social media has changed. Previously, their content would consist mostly of text-based posts. Data shows that video-centric content is a lot more prominent nowadays, increasing by over 632 percent. The significantly higher production time and costs for such videos is part of the reason for a decreased social media post count from these companies.

DARK POSTS
Aside from this, financial institutions have also been publishing “dark posts” which is defined as posts that only appear to a specified audience for more targeted marketing.

TWITTER
Findings show that banks have started posting more on Twitter. Data shows that since 2013, posts by banks have increased by around 55 percent. In addition to this, response times from Banks in Twitter have started dropping.
THIRD-PARTY SITES AND APPS
OPEN BANKING
According to an article published by Forbes, banks and financial institutions are currently trending toward open banking. Through open banking, customers are provided with the ability and permission to share financial data with third-parties such as non-bank companies or apps. This trend in the US was primarily driven by its growing popularity in Europe after the implementation of the PSD2 regulations. The PSD2 or the Revised Payment Service Directive in Europe obligates third-party providers with the authority to use APIs to view customer financial data. Ultimately, this trend will provide third-party companies, sites, and apps with more product offering options.
CONCLUSIONTrends which will influence the most change in product offerings by banks include cardless and more multi-channel ATMs, open banking, more video-focused social media use of banks; lighter, simpler, and more mobile-friendly websites and apps; and an increase in utilization of voice technologies, dark posts, and Twitter.

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Retail Banking US - Disruptions.

Through our research we found that people of all ages are becoming increasingly comfortable using an app or website to handle all of their banking needs, which is resulting in people visiting bank locations as little as possible.  Millennials are proving to be a disruption to the retail banking industry with their attitudes regarding how they bank and their distrust of traditional banks.  We found that peer to peer transfer platforms, digital innovations and digital currencies are also providing disruptions in the retail banking space.  Tech companies partnering with companies such as Amazon and Facebook are also disrupting the retail banking space, providing payment options to a portion of consumers that do not have debit or credit cards.  

OVERVIEW
We were able to find a number of articles that provided insights into what and who are disrupting the retail banking space.  Digital innovations such as peer to peer transfer platforms, chatbots and messengers, increasing use of mobile banking, and advances in ATMs have all helped to disrupt the retail banking space.  

In terms of who is disrupting the retail banking space, fintech companies partnering with companies like Facebook and Amazon will take business away from retail banks.  Millennials are disrupting the retail banking space with their distrust of traditional banks and the way they choose to bank.  More and more people are turning to mobile and online banking resulting in fewer visits to a bank location. 

MILLENNIALS PROVIDE DISRUPTION FOR RETAIL BANKING
 Millennials are disrupting the retail banking space with their distrust of traditional banks and the way they choose to bank.  Millennials visit their bank branch as little as possible.  The average consumer has little to no trust in their bank, they just use the cheapest option they can find.  Just 1 in 4 Americans trust their bank according to the most recent Gallup poll. This number is at a historical low.  Recent surveys showed that of the people who switched banks in 2016, 11% chose an online or virtual bank.  People of all ages are becoming increasingly comfortable using an app or website to handle all of their banking needs, not just the simple stuff.  

Data from a recent study conducted by J.P. Morgan Chase & Co. and Braun Research exposes the pervasiveness of online and mobile banking. For example, 78% of millennials used a bank’s website or online portal, with Gen Xers and Baby Boomers close behind at 75% and 67%, respectively. Furthermore, 35% are banking more online than they were last year, compared with only 16% who are visiting branch locations more frequently. The study also reveals statistics emphasizing the rise of mobile banking with 33% of survey participants are using their bank’s mobile app more often than they did last year.  Millennials are, unsurprisingly, the top adopters of their bank’s mobile app, at 67%, but the majority of Gen Xers are also embracing the mobile app, with a 55% adoption rate.

COMPANIES DISRUPTING BANK SPACE
According to a report released by Accenture in January, one third of banking and insurance customers would consider switching to an account provided by the likes of Google or Facebook. The card and payment industry is also primed for significant growth, presenting numerous opportunities.  While Facebook, Amazon or Google are unlikely to open a banking division in the immediate future, the impact that such companies are having on the industry is beginning to show.

 Amazon has also been flirting with the idea of entering the financial services market. The e-commerce giant launched Top Up in the UK at the end of August this year, a service that allows customers to transfer cash directly to their Amazon account through PayPoint outlets. Previously, in July, it had launched a similar service in the US called Amazon Cash.  Both services allow the company to access the small portion of consumers that do not have debit or credit cards. While money loaded onto Top Up and Cash can’t be withdrawn, the services are a step towards a traditional bank account. 

Amazon’s foray into small business lending aligns it closer still with traditional financial institutions.  Since 2011, the company has been looking at the data generated by small businesses that use Amazon Marketplace. The data allows Amazon to identify candidates for loans ranging in size from $1,000 to $75,000.  So far, the system appears to have been successful: Amazon reported it has issued $1 billion in loans to 20,000 small businesses over the past 12 months, with more than half of the businesses agreeing to a second loan.

FINTECH DISRUPTIONS IN RETAIL BANKING SPACE
Massive investments in fintech are spawning a wave of new companies reinventing everything from payments and money management to lending and financial planning.

Some analysts believe Fintech disruption could take as much as 10% to 40% of bank revenue and eliminate 1.7 million banking jobs by 2025.  Of the firms surveyed, over 70% stated they were investing in fintech solutions.

 Digital innovations such as money transfer apps, chatbots and messenger-based payments, mobile device payment options, and advancement of available ATM services are all helping with the disruption of the retail banking space.

QUICK TRANSFER MONEY APPS
Services such as PayPal, Venmo, Square Cash allow for easy P2P transfers that banks don't always offer.  These services allow consumers to link their credit cards or bank accounts and make quick P2P transfers. While set up takes a bit of time (and all parties involved in a transaction must be signed up for the service), repeat use makes paying for things like movie tickets extremely quick and easy.

CHATBOTS AND MESSENGER PAYMENTS
Soon, consumers will be able to pay for an item found on Craigslist, for example, by texting the seller directly from their phone’s messenger app, including Apple which turned on the messages payments functionality in June 2017. This emerging new technology trend sidesteps any experience that would otherwise involve a retail bank in some way.

MOBILE DEVICE PAYMENT OPTIONS
Technologies like Apple Pay, Android Pay, Samsung Pay, (etc.) let you connect a credit or debit card to your smartphone or smartwatch.  The global mobile payments market is estimated to hit $3.4 trillion by 2022. 

BUDGETING & PERSONAL FINANCE MANAGEMENT
Traditionally, banks were among the first places people considered for managing their wealth and investments, which made upselling retail bank customers into investment products a natural fit.
Services like Mint.com and Personal Capital have given consumers a better way to stay informed about their financial decisions by linking their spending behavior (via a bank account) to their platforms. Consumers can see how much money they spend at a specific retailer every month, or provide an easy path for saving money for special occasions.

DIGITAL CURRIENCIES 
 Bitcoin, a cryptocurrency or digital currency uses advanced encryption to regulate units of value and transfer funds without the need of a central bank. Mainstream banking consumers aren’t exactly chomping at the bit to use forms of payment like bitcoin right now, but little by little it appears to be gaining traction as more and more people dip their toes in the bitcoin waters.

ADVANCEMENT IN ATM CAPABILITIES
ATMs are getting smarter, and Americans are taking advantage of their enhanced capabilities with greater frequency.  Indeed, it is becoming the new normal for banking customers to use smarter and smarter ATMs, circumventing bank tellers altogether.  According to the study from Chase and Braun Research already cited, 70% of their consumers use an ATM to view account balances and transactions. Nearly half (46%) use ATMs to transfer money from one account to another, with 64% using ATMs to deposit checks.

CONCLUSION
Advancements in ATM capabilities, digital innovations, mobile banking, money transfer apps, and the consumers lack of trust in traditional retail bank is all contributing to a major disruption in the retail banking space.  Consumers, especially millennials, are becoming more and more comfortable using mobile banking options and are finding fewer reasons to visit banking branches.  With consumers embracing mobile and digital channels more and more each year, this is causing banks and other financial services to rethink how they are doing business.

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Retail Banking US - Physical Branch: The Future

OVERVIEW
Many banks are moving towards more online options and closing their physical locations, but this doesn't mean physical banks are going anywhere. Banks are downsizing and becoming more mobile and they are noticing a trend in customers prefering to do their banking online. There is still a need for physical locations for banks.  These locations are needed for those customers that need to visit an ATM or speak to a financial adviser. 
FINDINGS
THE DIGITAL TAKEOVER
The digital world is slowly taking over just about every aspect of our lives, and this is also true in the banking world. Millennials prefer to do everything online and not have to go into a brick and mortar location. Banks have noticed this trend and raced to develop their digital presence in the form of online banking and banking mobile apps. Inadvertently, while they were working on their digital presence, they were also undermining their physical presence. 
This is what is making their brick and mortar locations almost obsolete. The other competing factor that brick and mortar type branches are finding is fully digital banks. Entirely digital options are more popular among younger audiences and cost less because there are none of the overhead costs of a physical location, such as rent and supplies.

While brick and mortar locations are becoming the less popular option, this doesn't mean that it is going to disappear anytime soon. Most banks are looking to place their banking centers in more strategic locations. This is so that those that prefer a physical location or need one still have that option available. 
BANKING DESERTS
A banking desert is generally defined as a geographic area where there are no bank branches within a ten miles radius. Historically these banking deserts were more common in lower-income communities and areas with a high population of minorities, and this fact has not changed necessarily. One of the things that has changed is that banking deserts themselves are becoming more common. In the Mid-West and on the West Coast there is a high concentration of banking deserts, and they are most prominent in areas with low population counts. Since there are fewer people in those areas, there are fewer people to do banking. Banks are noticing this trend and either closing less popular locations or being more strategic about their locations. This is also notable because the West tends to be more rural with fewer big cities. These locations also have a population that has less trust in banks or not enough money to be willing to bank. Some have even noted that the fees for an account outweigh any benefit associated with having an account in general. 
OPENINGS/CLOSINGS
While the significant number of brick and mortar bank locations closing might seem to indicate an overall decline in brick and mortar locations, available data indicates that brick and mortar locations are actually on the rise. Banks are closing under-performing branches, and opening branches in locations that will be more profitable. Between June 2016 and June 2017 there were a total of 1,700 branches closed across the US and this trend appears to have continued into the latter part of 2017 as well. 

Banks like Bank of America and Chase are closing less profitable banks and opening new banks in expansion territory. Bank of America is expanding west from the east coast into cities such as Cleveland, Denver, Minneapolis and possibly Pittsburgh shortly. Bank of America has stated that they are going to open 500 branches over the next four years in new territories. Chase is also planning on opening new physical banks to the tune of about 400 new locations. 

Bank of America and Chase are considered megabanks in the banking world, and while they see slight growth in physical locations and more strategic planning smaller scale banks are seeing the opposite. One research firm suggests that within the next decade as many as half of the US branches will be closed. The closure of these brick and mortar banks will lead to smaller banking centers if a company has any at all. 
STAFFING CHANGES
Along with the openings that Bank of America and Chase are planning in the next few years they will be adding more staff. Bank of America plans to add over 5,000 employees to their company and Chase is planning to add 4,000 employees to their company. One of the reasons the two companies are planning on expanding revolves around Trump's new tax law which massively benefits domestic business, such as Bank of America and Chase. 

In the smaller banking companies, the decline of physical locations is also showing a decline of employees. As banks close locations that aren't profitable, they are also losing the employees they had at that location. Another notable fact about digital banking is that the employees' companies need are more tech-savvy or have a degree in computer software or technology. This is leading to a change in the workforce in these companies from accounting and banking trained employees to those with technology training and an understanding of banking and finance. 
CONCLUSION
Physical banking is seeing a general decline due to the rise of digital banking, but it's not going away altogether, at least not yet. Banking centers tend to be concentrated in higher population areas where more people are likely to visit the bank on a regular basis. This also means that metropolitan cities have more physical banking locations and that the East Coast, which is densely populated compared to the rest of the US, has the highest percentage of physical banking locations. This is also causing a trend in more banking deserts in rural and low population areas simply because there aren't as many people that are likely to use a physical location. Smaller and local banks are closing more locations and going digital whereas megabanks are strategically opening and closing banks to areas of the greatest need. Since there are gradually fewer physical locations, there is generally less staff needed at these locations. This means a smaller staff overall for each company, and the staffing is more commonly technology experts and not banking experts.

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Retail Banking US - What's Not Being Addressed

Overview
The United States retail banking sector is lagging in the account creation process, the lack of quality assistance in both digital and face to face encounters, checking account fees, after hours banking, and short-term mortgage loans.


Lack of Quality in Digital and Face to Face Assistance
Bank customers have expressed a clear desire for better communication with their banks for financial advice.  78% of retail bank customers feel that they would benefit from receiving financial guidance from their bank, but only 28% of retail bank customers can recall actually receiving that advice.  While 58% of customers were satisfied with the advice that they received when speaking with a bank representative, the numbers drop when dealing with digital methods of receiving advice.  Only 45% of customers who received advice via the bank’s website or mobile app and 33% who received advice via email were satisfied with the advice they received.   58% of retail banking customers stated that they would like to receive advice by way of the bank’s mobile app or website with only 12% having received advice through these means.

Account Creation Process
Out of 3000 retail banking customers surveyed, 27% felt that improvements could be made in the account creation process.  In particular, millennial (ages 22-37), digital retail banking customers and existing customers who are opening additional accounts would prefer improvements in the process of creating a new account, with 75% of those seeking improvement being under 50 years of age.  The speed with which an account is opened is a top priority when considering improvements needed.  Banks that require 45 to 60 minutes to open an account are five times more likely to be flagged for a need for improvement that accounts that only take 15 minutes or fewer.  These same associations apply to consumer loans as well as wealth management accounts.

While only 5% of those surveyed opened accounts using a mobile application, those who did stated that the process needed improvement, with 54% of those being millennials.  Many banks recognize the need for better procedures in mobile banking, especially in regard to the opening of new accounts as more consumers turn to this avenue for their banking.

Consumers also noted a need for improvement in the bank’s documentation and information requirements, stating that this information was not clear.

Checking Account Fees
In a survey of 3,001 retail banking customers, checking account fees were listed as a primary area in the banking industry that needed improvement.  There has been a peak in checking account fees, with free accounts not as readily available as they once were.  Seven out of ten banking consumers stated that the absence o f monthly fees were a requirement when considering a bank for checking.  This was particularly noted by women as well as older respondents.  Consumers also stated that accounts with no minimum deposit required were a necessity in the consideration of a bank for checking.


After Hours Bank Services
In a 2016 survey, 69% of retail banking consumers stated that they wanted banking available beyond normal banking hours.  Numerous banks have begun to employ Interactive Teller Machines (ITM) as a solution to after- hours banking, but these devices are only helpful for simple transactions.  13% of respondents stated that automated and self-service banking technology was often difficult and frustrating to use.

Short-term Mortgage Loans
In a survey of 3,001 banking customers it was noted that consumers prefer a short-term loan over typical 30 year mortgages.  Banks rely on long- term mortgages as a primary interest source in the United States mortgage industry.  16% of banking customers stated they would consider a mortgage if it was a shorter term 15 year mortgage.  

Conclusion
Retail banking clients have stated a desire for better customer care in regard to quality assistance, a speedier account creation process, the removal of checking fees, after hours banking and short-term mortgage loans. 