JD Power data helps explain the difference between how CEOs of mid-sized banks, with assets between $2 billion and $50 billion, view their retail customer bases compared to how CEOs at large banks, with assets over $250 billion, do. JD Power splits retail banking customers into four groups, based on transaction behavior:
- 10%, branch dependent;
- 44%, branch primarily, but use digital;
- 13%, digital primarily, but use a branch once a month;
- 28%, digital dependent.
Customers of the large banks skew toward digital (32% are digital-only, and 19% digital-primarily), while the customer base of mid-size banks are skewed toward branch-centric customers (16% are branch dependent and 52% branch-primarily). The problem for smaller banks, though, is that branch-dependent customers tend to be older; their average age is 75. While these branch-dependent customers have significantly higher deposit balances than younger customers, as time passes and younger customers age and accumulate more wealth, mid-size banks face a future deposit challenge.