From branches to browsers: A comparative analysis of direct and traditional bank clients in Germany

This study examines retail banking clients with a house bank relationship either to a traditional bank (with a branch network) or a direct bank (without a branch network). Analyzing a representative sample of over 14,000 household‐wave observations from 2011 to 2023 in Germany, we find that direct bank clients tend to be significantly younger, possess higher financial literacy, are better educated, and exhibit higher risk tolerance. Furthermore, direct bank clients demonstrate higher levels of stock market participation and invest a larger proportion of their financial assets in risky financial assets. We conclude that direct bank clients are generally well‐equipped to make Do‐It‐Yourself (DIY) investment decisions.