74% of All Financial Product Sales in the UK Do Not Involve a Bank Branch – Kearney

Leading consultancy Kearney has today released the latest data from its annual European Retail Banking Radar, revealing that 74% of all product sales in the UK do not involve a branch or human interaction, confirming that consumers overwhelmingly prefer to interact with financial institutions remotely.

Equally, around 82% of all sales incorporate at least one digital channel, and there has been a 43% drop in physical bank branches since 2008, with 3% closed in the last year alone.

From branches to bytes

For the first time over half (52%) of all interactions that European customers have with their banks regarding new product purchases are on digital channels, further supporting this trend.

67% of consumers research savings options online (a 25% increase from 2020), and 63% have opened a savings account online – nearly double that of 2020 (36%).

This marks a shift from the past, where digital channels were mainly for research and purchases happened face-to-face. Kearney’s report reveals a more balanced split between physical and digital channels across Europe.

Digital banking gains momentum

Spurred initially by the COVID-19 pandemic, the adoption of digital channels for banking has made big strides in the last five years. In the UK, nearly three-quarters (74%) of consumers have bought their last financial product online, a 26% increase since 2020 (48%).  

Countries such as Germany, Austria and Portugal have more than doubled their digital adoption rates since the pandemic, with over 50% of consumers having bought their most recent financial product online.

That being said, branches remain essential for high-value, complex transactions across Europe. Customer interactions with independent advisers in Europe actually grew by 50% compared to only a year ago. These were most favoured in the Netherlands and the Czech Republic, where respectively 33% and 23% who took a new mortgage or refinanced a home equity loan used physical channels.

Roberto Freddi, Partner at Kearney, comments:

“With regulation around digital financing continuing to evolve, banks must prioritise investments in advanced technologies, continuous employee development, and robust data management practices to remain a trusted partner in their customers’ financial journeys.

“While the value of face-to-face interactions remains crucial, building a powerful channel strategy will be essential to deliver seamless end-to-end digital sales. Customers expect the same level of service and information regardless of the channel they use, and our findings show that creating a cohesive customer experience will remain a key task to meeting this demand in the coming years.”

Please find a link to the full report here: https://www.kearney.com/industry/financial-services/article/retail-banking-s-new-reality-the-digital-shift-and-the-future-of-branches