The number of Bank of America branches is steadily declining as more and more people use online banking services. In just one week, Bank of America announced plans to close 41 branches nationwide.
Well-known banks such as Bank of America, Chase, Capital One, U.S. Bank, and PNC are all cutting costly brick-and-mortar locations. PNC alone has said it will close 10 branches in six states.
In 2023, Chase closed 157 branches but opened 195, making it the only major bank to surpass last year’s branch count this year.
Greg McBride, chief financial analyst at Bankrate.com, believes the trend of branch closures will likely continue, but not at the same pace as in recent years. He argues that banks will still need some physical branches for enquiries and sales, but day-to-day transactions will increasingly be conducted online.
An analysis of OCC data by DailyMail.com found that banks in California and the Midwest closed more branches last year than any other region. Those two regions closed more than 1,500 branches, while opening just 472 new branches.
Banks are closing branches for several reasons, including rising rent and employee costs, increased use of online banking and a desire to consolidate operations.
While branch closures may inconvenience some customers, they generally do not have a significant impact on a bank’s overall financial position. Customers will still be able to access their accounts and conduct most transactions online or through mobile apps.
Banks are also investing in mobile and online banking technology to make it easier for customers to bank without having to travel to a branch. Banks are also offering various incentives to encourage customers to switch to online banking, such as fee reductions and reward programmes.
Despite the failure, banks will continue to play an important role in the U.S. economy. Banks are vital in providing financial services such as loans, deposits and investments to individuals and businesses.