Reaching out to bank customers in rural communities

By : Robert Johnston

July 30, 2015 12:34 PM

How do you extend your reach so all banking services are available to consumers wherever they happen to live?

This is an important question for banks that has so far gone unanswered. Branches and ATMs have always, by economic necessity, been located in populated areas. It’s a particular issue in the developing world with efforts to include more people in mainstream financial services, but it's also a problem in developed markets.

More than ever we have a range of ways for consumers to interact with their bank.

Mobile is also key part of this discussion. “Because rural residents may have to travel longer distances to visit financial institutions compared to urban consumers, mobile banking services may be particularly convenient,” notes the Federal Reserve in a recent study.

Mobile, and online banking generally, has two advantages: it is available 24 hours a day and saves customers a trip to the bank. In many rural areas where there are no broadband lines, mobile is often more reliable than online.

Yet, in the US at least, rural residents are less likely than their urban peers to use mobile banking, despite its clear advantages, the Fed report found.

This could be due to a range of factors, such as wide demographic differences.

US bank customers may be used to (and willing to) travel to their branch. If you’re in town anyway to shop for groceries it’s not a great hardship to visit the bank at the same time. Patterns of consumer habits need to be understood - some folks just don’t want to use mobile banking no matter how many of their concerns are dealt with. Fifty-nine percent of those who do not use mobile banking said they had "no interest in performing any mobile banking activities even if their concerns were addressed," the Fed report explained.

While mobile banking is important, it’s just one part of the jigsaw puzzle. Banks cannot simply foist mobile or online as the answer to branch closures, especially for some of the most important transactions.

Other technology is just as important in serving rural customers’ needs. ATMs with video teller technology are a good example. While it may not be financially viable for a branch to exist in a small town, banks can deliver a full range of services via an ATM kiosk that enables customers to speak face-to-face with tellers to carry out even the most complex transactions such as agreeing a mortgage.

Meanwhile, we can also look at branches afresh. For instance, the concept of shared branches, or placing smaller outlets in existing retail environments, is becoming more popular as banks search for ways to continue to meet the needs of all their customers while staying on top of costs.

Visit NCR Financial Services to explore the ways that we can help you.


Robert Johnston

NCR Financial Services

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Based out of NCR's R&D center in Dundee, UK, Robert Johnston is a global evangelist for NCR’s retail banking software strategy. Here, Johnston shares his insights on the banking industry and how consumers are driving today's conversation.