In a substantial shift towards digital banking, numerous US banks have recently shuttered 28 branches in just one week across various states.
According to Daily Mail, this wave of closures from July 9 to July 16 marks a heightened phase in the banking industry's move to cut costs and address changing customer habits.
Major banks such as Wells Fargo, Bank of America, and US Bank each closed eight branches during this critical week. Smaller banks, including Greenville Fed, Chase, and Schaumberg Bank & Trust, also contributed to the closures, with each closing one branch.
Ohio felt the greatest impact, with four branches closing, while California saw three of its local branches shut down. The trend reflects a broader strategy of banks reassessing their physical presence across the nation.
This year alone, various banks nationwide closed 539 branches, with the number potentially exceeding 1,000 by the end of 2024 if the current rate continues.
Andrew Murray from GOBankingRates explains the shift: "The majority of Americans, from Gen Z to boomers, are in less need of a traditional bank, which may explain the rising number of physical branches that have been closing over the past year." This reflects a broader acceptance of digital banking solutions over traditional branch visits.
Furthermore, the operational costs of maintaining standalone branches are substantial. With an average annual cost of about $2.6 million per branch, banks are increasingly opting to serve their customers through digital platforms.
Since the beginning of the year, Bank of America has closed 98 branches, while US Bank has reduced its count by 73. These numbers underscore the aggressive adjustments banks are making in response to evolving banking preferences.
Wells Fargo commented on the matter, asserting:
Over the last several years, we have rightsized our branch network, and we may continue to combine two older existing branches into one better-situated location. Doing so does not take away the importance of our customers and the communities we serve.
Bank of America revealed that their adjustments reflect the fact that "more and more, our clients are using digital banking for their everyday financial needs and coming into financial centers for more significant needs or to have conversations about their finances."
Similarly, US Bank's approach aligns with this digital transition. They stated, "As we evolve along with our clients, we are reevaluating our physical footprint, and in some instances, consolidating branch locations in select markets." This highlights a strategic consolidation aimed at enhancing service efficiency.
The closure timeline reflects a strategic effort throughout 2024 to optimize service delivery. Starting with 222 closures in January and February, major banks like Wells Fargo, PNC, and Citibank have continued to restructure their networks throughout the year, reflecting a decisive shift away from traditional brick-and-mortar branches.
U.S. banks are significantly reducing their physical branches, shifting towards a digital-first strategy driven by economic reasoning and changing customer preferences. This trend of closing bank branches is set to dramatically transform personal and community banking, ushering in a new era of digital financial management and services.
