The traditional bank branch continues to lose ground as Canadians conduct more day-to-day transactions at self-service banking machines (ABMs) and over the Internet, according to an annual tracking study by marketing research firm TNS Canadian Facts.

Conducted in the fall of 2006, the study found that just over half of Canadian adults (53%) reported visiting a branch in the month prior to the survey, the lowest level of branch banking reported since the study began in 1994.

At the same time, online banking continues to attract new users. In Fall 2006, 37% of Canadians reported using an online banking service in the month prior to the survey, compared to 34% in 2005. Six out of 10 Canadians with Internet access have signed up for online banking.

Usage of ABMs has also shown modest growth over the past year. In Fall 2006, 81% of Canadian adults had used a bank machine in the month preceding the survey, up from 78% in 2005.

Over half of bill payments, account transfers and account balance enquiries are conducted online. ABMs are the dominant method of making cash withdrawals, with nine out of every 10 withdrawals made at a bank machine. Deposits of cheques and cash at ABMs outnumber in-branch deposits by a ratio of two to one.

“We are seeing a continued trend toward reliance on two main modes for day-to-day transactions: online banking and ABMs,” said Rhonda Grunier, a vp at TNS Canadian Facts.

“While Canadians are interacting with staff at branches less often for routine banking activities, this does not mean that the branch is becoming irrelevant or obsolete. Canadians continue to prefer to go their branch to make RSP contributions and to acquire financial products, such as new accounts and mortgages, than to do so by phone or online. Furthermore, Canadians are still most likely to visit their branch when they want information about the products and services that their financial institution offers,” added Grunier.

For the study, TNS Canadian Facts surveyed a nationally representative sample of Canadian adults 18 years and older. A total of 1,899 self-administered mail surveys were completed between Oct. 6 and Nov. 17, 2006. The survey results are considered accurate to within 2.2 percentage points, 19 times out of 20.