Bank customers like mobile apps, but won’t give up their branches

Bank customers nationwide are using mobile banking, but remain cautious when it comes to digital wallets. And they still want their bank branches and face-to-face customer service.

The new retail banking study by Market Force International polled 3,700 U.S. banking customers about their favorite and most disappointing experiences.

According to MFI, 65 percent of people have downloaded their bank’s mobile app, with most mobile customers sticking to basics such as checking balances and statements and transferring funds.

Only 7 percent report using digital wallets, though, PayPal is the most commonly used.

Despite the rise in popularity of online and e-banking, customers value face-to-face transactions and interactions at a physical branch over the past three months.

“Our research underscores how critical the adviser role is in retail banking, not just because banks need to sell their product portfolio, but also because it’s an opportunity for them to gain a competitive advantage in customer loyalty,” said Cheryl Flink, chief strategy officer at Market Force International.

The study also found 21 percent of respondents visited a bank branch and met with a bank’s financial adviser to set a money management strategy or solve a problem. Twenty-seven percent contacted a bank’s call center.

Flink said the survey found that 17 percent of those who consulted with an adviser had a less than great experience, “which tells me that many banks could be doing a better job of focusing on consumers’ financial well-being with superior advisery services.”

Meanwhile, survey results show customers are beginning to recognize that mobile banking is a money-saving opportunity, up to $50 annually per customer.

Mostly mobile banking customers are using their apps to check their balances (84 percent), check their statements (62 percent), transfer funds (57 percent), deposit funds (54 percent, use the quick-check balance feature (43 percent) pay bills (40 percent) and find an ATM or branch (35 percent).

Yet few mobile customers tap into the app for activities such as paying others or setting up direct debits, the study found.

When asked what services and issues they prioritize with their favorite banks, consumers point routinely to ease of doing business, transparency and financial stability. In those areas, two big banks stand out — JPMorgan Chase &Co. and U.S. Bank.

Although the recent launch of ApplePay has put the spotlight on digital wallets, awareness seems to be the biggest barrier to adoption. When asked why they are not using digital wallets, three out of five said it is because they are not familiar with them.

Plaza Bank settles with Justice

Plaza Bank, which operates branches in Las Vegas and Irvine, Calif., says it has entered into a civil agreement with the Justice Department over the use of a single third-party payment processor.

The bank terminated its deal in 2010 after it was recapitalized and a new management team was put into place. The settlement is subject to court approval.

Under the terms, Plaza Bank, without admitting liability, will pay the government $1.225 million and abide by certain conditions if the bank decides to provide banking services to third-party payment processors.

“This was an issue we inherited when we took over the bank, and as of Dec. 31, 2014 we fully reserved for this,” Gene Galloway, Plaza Bank CEO, said in a statement. Plaza Bank earned $5.2 million, or 29 cents per share, last year.

The Justice Department complaint alleges that from July 2007 to mid-2010, Plaza Bank knowingly permitted fraudulent merchants, acting through an intermediary called a third-party payment processor, to illegally withdraw millions of dollars from consumers’ bank accounts.

News &Notes

Western Alliance Bancorp, parent of Bank of Nevada, is expanding its footprint into Silicon Valley with the acquisition of Bridge Capital Holdings for $425 million.

The deal will allow Western Alliance to begin servicing mid-stage technology companies and multinationals. Bridge Capital has $1.8 billion in assets.

Joe Morford, an analyst with RBC Capital Markets, wrote in a research report the deal was “attractive” because it builds out Western Alliance’s presence in the San Francisco Bay Area and the business of banking technology companies.

Morford didn’t describe the deal’s effect on Bank of Nevada, but he wrote that Western Alliance’s “risk profile” has been helped by the strengthening recovery in Nevada’s economy.

And, the Federal Reserve has approved Zion Bancorp’s capital plan in the regulator’s annual stress test. The Fed approved the plan after finding the bank could keep lending in a severe economic downturn.

The decision is good news for Zion, parent of Nevada State Bank, which had its capital rejected last year because of its large portfolio of collateralized debt obligations.

CDO’s are a risky type of structured asset-backed security investment with a high return and were at the heart of the 2008 financial crisis. Originally developed for corporate debt markets, over time CDOs evolved to encompass the mortgage and mortgage-backed security markets.

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