Why Can't Banks Get Customers to Use Cheaper Channels?

For the October issue of Bank Systems & Technology, I wrote a piece on channel preferences and generational differences. The article cited a recent survey from the American Bankers Association that found that 37 percent of all consumers use the branch more often than any other channel, but the number jumps to 47 percent among the 55 and older set.I know I've said it before, but I still cannot believe that people still go into the branch to withdrawal cash. Ever since my stepmother (who is under 60) told me she doesn't even know how to use the ATM, I've been asking Baby Boomers (well mostly second hand through their children) if they use the ATM. Overwhelmingly the answer is "no." Many don't even carry their ATM card with them. They also use checks for purchases!

The worst story I heard was from my brother-in-law. His mother had asked his father to deposit a check at the ATM. It was the first time he had ever made a deposit at the ATM. His wife became concerned after the check didn't show up in a few days. It turns out that his dad had stuck the envelope in the small slot between the ATM and the wall! Unbelievable.

Thankfully, my own parents use the ATM, I think mostly because they work during general banking hours, and I know they have been doing so for at least 20 years. But sadly, despite longtime use of the ATM, they still haven't gotten used to online banking, even though I extol the virtues of online bill pay every time I see a stack of bills piled in my mother's kitchen.

So, why are these people not using their ATMs? (One step at a time - We'll get to online banking later.)

Banks have got to find ways of migrating their customers from expensive channels like the branch and call center, to cheaper channels like ATMs and the Internet.

One credit card company is doing a good job at shaming some of these consumers into being embarrassed when using checks or cash at retail locations.

Other banks attempt to do this by charging their customers for repeated branch visits. ING reserves the right to drop you as a customer if you call their contact center too often. (You don't get to offer those high interests rates by funneling money into expensive channels.)

Banks should make it easy for customers. Help them out. They should ask them if they are comfortable using the ATM when they come into the branch. If they aren't, an employee should show them how. If they are concerned about safety, address their worries. Offer incentives for ATM withdraws and deposits. Run promotions. Have larger text options for older customers. Install help buttons.

Do something.I know I've said it before, but I still cannot believe that people still go into the branch to withdrawal cash.