One in three banking customers still use physical channels


Kearney has published the latest findings of its annual European Retail Banking Radar, which includes a channel survey, conducted annually in 12+ European countries since 2020.

The research finds that following the pandemic, an ‘omnichannel’ combination of physical and digital (Phygital) options is of clear importance to consumers.

Overall, 29% of consumer interactions in Europe in 2023 were omnichannel, namely where research around products was conducted through one channel but the purchase made in another.

Digital channels grow, but physical channels remain in use

45% of consumers in Europe used digital channels to purchase banking products in 2023, up from 33% in 2020, and 37% of European banking interactions are now solely digital in nature (both research and purchase conducted digitally).

Kearney’s research also reveals that countries such as Spain and the United Kingdom showed the most dramatic shift in consumer attitudes toward digital banking channels in recent years, with digital purchases rising from 16% to 38% (Spain) and 48% to 69% (UK) between 2020 and 2023.

In contrast, when compared to 2020 and the peak of the pandemic, the use of digital channels is now lower in some European territories.

Overall, a third (33%) of all interactions in Europe remained wholly within physical channels.

The UK trends more digital than the European average, with more than two-thirds (69%) of all purchases through digital channels made on online or via mobile banking in 2022.

Branches still have a vital role to play

Although nearly half (41%) of all bank branches have closed their doors since 2008, physical branches still have a key role to play for many consumers, with 55% of European respondents visiting a bank branch at least once a quarter during 2022.

The main drivers behind consumers’ continued use of physical bank branches include personalised advice, human interaction and a higher degree of trust.

Every 12th (8.5%) person who uses a branch says they are not ready to switch to digital channels for anything.

“It’s clear that the trend toward digital banking that accelerated during the pandemic is still here to stay,” says Sameer Pethe, Partner at Kearney.

“However, demand for physical branches from consumers is still a key factor – with customers across a range of demographics not yet ready to abandon in-person interactions.”

“Moving forwards, it will be a balancing act for many financial institutions as they aim to satisfy consumers’ growing omnichannel preferences whilst managing the cost implications of maintaining a branch network in a time of increasing digitisation.”


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