Why Do You Need A Brick-And-Mortar Bank?

Ben GranBanking Reviewer and Writer

Ben Gran is a freelance contributor for Forbes Advisor on banking. He also writes for The Ascent (a Motley Fool service), where he covers insurance, credit cards, personal finance and investing. Ben has over 10 years of experience as a freelance content writer for regional banks, tech startups, and financial services companies like LendingTree and Prudential. He also works as a ghostwriter for business executives, with bylines in publications such as Fast Company, Entrepreneur and TechCrunch.

Daphne ForemanEditor

Daphne Foreman is a former Banking and Personal Finance Analyst for Forbes Advisor. She has worked as a personal finance editor, writer, and content strategist covering banking, credit cards, insurance and investing. As a small business owner and former financial advisor, Daphne has first-hand experience with the challenges individuals face in making smart financial choices.

Ben Gran,

Ben GranBanking Reviewer and Writer

Daphne Foreman

Daphne ForemanEditor

Banking Reviewer and Writer, Editor

Doug WhitemanEditorial Director, Financial Services

Doug Whiteman is an award-winning journalist with three decades of experience covering personal finance, starting when he was the Washington, D.C.-based consumer news editor and reporter for Associated Press Radio in the 1990s and early 2000s. He's passionate about making financial information clear and useful for consumers — taking personal finance from "Huh?" to "Ah!" He has been quoted by numerous media outlets including The Wall Street Journal, CBS News and USA Today.

Reviewed

Doug Whiteman

Doug WhitemanEditorial Director, Financial Services

Editorial Director, Financial Services

Reviewed

Updated: Mar 13, 2020, 12:55pm

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Why Do You Need A Brick-And-Mortar Bank?

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In this age of online banks and fintech mobile apps, routine banking transactions can be scheduled and executed at the tap of a button on our phones. So it might seem strange that anyone would claim to need a brick-and-mortar bank. Aren’t traditional brick-and-mortar banks going the way of the landline phone and the Rolodex?

A 2019 Wells Fargo report predicted that 200,000 banking jobs would be lost to automation and AI in the next 10 years, and another survey found that, since 2009, the number of bank branches in the U.S. has declined by 11.5%.

A new generation of digital-only VC-backed financial services startups and neobanks are eagerly seeking to disrupt what they see as the sleepy, outdated business model of neighborhood bank branches.

With so many technological and economic trends seeming to be lining up against it, does the brick-and-mortar bank still have a future?

The short answer is “yes.” Despite the growing appeal of convenient options like online banking and mobile apps, there is still a role for conventional “in real life” brick-and-mortar banking. Depending on your financial needs and goals, there are several situations where you still should maintain a real-world relationship with a brick-and-mortar bank near you.

Here are six reasons why you may still need—or want—a brick-and-mortar bank.

Personal Touch to Solve Problems

Mobile apps and online banking can be wonderful conveniences when your financial life is going smoothly. But what about those occasions where you encounter a problem? Whether it’s a fraudulent charge on your account, a lost debit card, possible identity theft or complicated questions about your account or loan application, the usual online chatbots and customer service menus may not be enough. Sometimes you can save time and aggravation by going to a local bank branch and talking to a real person.

Having a real-life relationship with your local bank or credit union can lead to some surprising solutions. It can pay to be more than just a name on an account summary screen. If your local bankers know you well and have that personal connection, they may be more likely to (within regulations and limits) offer you a better deal, forgive a fee or give you some extra help.

Some of the best financial services organizations are capable of delivering inspiring customer service. For example, in this customer service success story from CHROME, a federal credit union in Washington, Pennsylvania, two credit union employees went to a customer’s home to help him sign up for online banking services, only to find that the customer’s basement was flooded—providing the opportunity to help in a way their customer never would have expected..

The lesson: It can help to have a real-world relationship with your bank or credit union. These companies are full of real people who like to help people. When you have in-person interactions, it’s more likely to create situations where companies can be more creative with their customer service.

Advice on Complex Financial Topics

It’s true that a lot of your daily banking transactions and routine banking chores can be handled online. But what if you have a more complicated situation?

For example, what if you…

Lost your job and need to adjust your spending?
Inherited some money and don’t know what to do with it?
Suffered damage to your home due to natural disaster or fire?
Want to save up for a down payment on a house?
Want to refinance your mortgage?
Want to save more money for retirement?
Want to save money for your child’s college education?
Are considering getting a home equity loan or line of credit?
Are struggling to prioritize and make the best decisions for your financial life?

If you are encountering more complex situations with your finances, going to your local bank branch and talking with a personal banker or loan officer is often a good first step. Some banks offer general financial advice or financial planning services, depending on your situation.

Bank employees, even if they cannot offer comprehensive financial planning services, may be able to make referrals or recommendations to financial advisors or other professionals, and can help answer your questions about money and budgeting.

Some of your most sensitive and important conversations about your money should start at the bank. And a lot of people still feel most comfortable having those conversations in real life, with a real person, behind closed doors.

In-Person Suggestions for Other Financial Solutions

A brick-and-mortar bank also can be a good place to get help for other aspects of your finances. Sometimes, just by talking with you in person and looking at your account, bank staff will notice possible solutions to help you save money or make your financial life easier.

If you’re frequently overdrawing your personal checking account, they might recommend some options for overdraft protection. If you’re paying a lot of money in credit card interest to various other banks, your bank branch employees might be able to offer you a debt consolidation loan to help you save money.

If you’re constantly getting dinged with ATM fees, maintenance fees or other charges, your brick-and-mortar bank staff might be able to look at the total picture of your banking relationship and figure out some options to help you avoid some fees. For example, 42% of banks will waive their ATM fees if the customer signs up for direct deposit.

Depending on what’s going on in your financial life, sometimes you can get the most effective and immediate help by having a conversation in real life at the bank.

Cash and Foreign Currency

There are so many intriguing new payment apps and other fintech solutions on the market now, but if you need quick cash, sometimes you just can’t replicate the convenience and reliability of going to the bank. Mobile apps cannot dispense cash.

Depending on where you do your banking, having a brick-and-mortar banking relationship may give you access to an extensive network of fee-free ATMs where you can get cash without paying for the privilege. However, online banks offer extensive ATM networks as well.

But what if you need access to more cash than your daily ATM withdrawal limit can provide? For example, what if you want to buy a car with cash from a private party seller? This is another occasion when having a brick-and-mortar bank can provide added convenience.

If you’re flying to Paris and want to get some euros in cash so you have some foreign currency in your wallet and ready for your trip, your brick-and-mortar bank can quickly put international cash in your pocket in a way that no app (for now) can duplicate. As a bank customer, you may enjoy lower or no fees for the exchange, depending on your bank’s policies.

Special In-Bank Services

Brick-and-mortar banks offer specialized services for various needs. For example, if you want a safe deposit box to hold a copy of your will or the deed to your house, you can sign up for this service at a brick-and-mortar bank.

If you want to cash in a big jar of coins, many banks can do this for you. (Without having to stand in line at the grocery store.)

If you need to send a wire transfer, get a cashier’s check in real time (instead of waiting a few days for it to arrive from your online bank) or deal with complex transactions, it often can be handled most efficiently by just going to the bank and explaining the situation in person.

If you need the services of a Notary Public to notarize a legal document, you can get this done at your local bank branch.

Business Banking Relationships

Most of the reasons to bank with a brick-and-mortar bank are applicable to personal banking. If you’re a small business owner, having a good relationship with a local brick-and-mortar banker can be especially important.

Small business owners often have complex and customizable needs that demand a more involved banking relationship. Whether you need business loans, cash management services, assistance with international trade or other financial services, working with a banker in real life is still a valuable way to have someone understand your business’s challenges and offer solutions based on a big-picture view.

For example, if you’re a small business owner who is frequently stopping at the bank and depositing large amounts of cash for your small business, your banker may be able to recommend business banking cash management services that can help you save time and money.

The Bottom Line

The world of financial services will continue to evolve, and it’s likely that bank branches and brick-and-mortar banking jobs will continue to decline as part of the overall banking industry changes in the U.S. Tech-savvy Millennials and even many small business owners are looking to online banking and alternative lenders for greater convenience, competitive rates and easy-to-understand options.

However, so long as people need to talk to other people to understand their finances and make decisions about their money, brick-and-mortar banking is still going to serve a vital need.

Being able to walk into a bank and talk to a real person in real time can help you understand your financial options and make decisions about loans and investments. You also can get specialized services and access to cash and payment channels that are most conveniently handled in person

Even with all the shifts in the banking industry, and the increased need for digital access, it’s unlikely that brick-and-mortar banks will go away anytime soon. Unless you’re able to live your financial life entirely online, there are still valuable reasons to keep going to the bank.