Banks are closing branches faster than they’re opening new ones. U.S. banks closed over 3,000 branches last year while opening just 1,000. JPMorgan Chase led in branch closures last year, shuttering 144 branches, while opening 133. The trend will likely continue as banks face staunch competition for deposits and younger customers from online banks, fintech firms and Big Tech.
Note that the number of bank closures varies widely by area. Between 2017 and 2021, more than 7,000 branches were closed in the U.S., which represents 9% of all locations. One-third of these closures have been in areas with large minority populations.
The initial wave of closures was sparked by mergers and acquisitions in the wake of the 2008 financial crisis. More recently, changing consumer preferences and improved banking tech are the reasons given for ditching brick-and-mortar locations. It shows that big-bank investment in tech is paying off, as new apps and websites with an expanding array of services have lured more customers.
Written by Rodrigo Sermeño for Kiplinger ~ September 26, 2023
