41 Major Bank Branches Closed Within Two Weeks Following Hundreds of Bank Closures This Year

This move reflects the ongoing transition towards online banking, leaving many customers to reconsider their banking options. The trend is clear: digital is the future, but what does this mean for your local branch?

This substantial reduction in physical branches is part of a broader banking industry trend towards consolidating resources and enhancing online banking platforms. Customers of U.S. Bank are particularly affected, facing a new reality of fewer in-person services.

Additional closures were reported by smaller banks like First National Bank, PNC, SouthState Bank, and Huntingdon, indicating a widespread industry shift. These closures spanned across various states, including Florida and Missouri.

Andrew Murray, lead data researcher at GOBankingRates, said, “The majority of Americans, from Gen Z to boomers, are in less need of a traditional bank,” highlighting a key factor driving these closures.

In July, U.S. Bank closed seven branches, and Bank of America shuttered six in the space of just a week.

The last year the number of branches in the U.S. increased was 2011. That year, there were more than 85,000 branches nationwide. Since then, the number of branches has plummeted to about 70,000.

This growing preference plays a significant role in why banks are choosing to close physical locations.

Murray noted, “It’s likely that overhead costs are a large factor especially given that our survey shows how infrequently people visit brick and mortar banks.”

Steven Reider, founder and president of Bancography, said: “I think Bank of America has leaned into that more than the other large banks have.” Bank of America potentially saved nearly £100 million in January and February alone.

This trend was most pronounced in California, which saw 72 closures, followed by New York with 51, and Pennsylvania with 40, reflecting a significant reshaping of the banking landscape in these states.

The bank stated, “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.” 

“As we evolve along with our clients, we are reevaluating our physical footprint, and in some instances, consolidating branch locations in select markets,” the bank stated earlier this year, emphasizing its commitment to aligning operations with customer needs.

This information is crucial for customers needing to find alternative banking solutions or considering the switch to online services.

The feedback has been mixed, with some appreciating the push towards digital efficiency and others concerned about losing personal interaction with their bankers.

Even among the elderly (ages 65 and older), 67% said they prefer online or in-app banking over visiting a physical branch.

“Customers must visit a physical branch during operating hours, which may be inconvenient for those with busy schedules or limited mobility,” said Sumeet Grover, chief digital and marketing officer at Alliant Credit Union.

“In-person banking is also inherently limited by the physical locations of branches, potentially excluding customers who live in remote areas,” said Grover.

“As we become an increasingly urbanized country, the demand in these legacy rural markets just fades away,” said Reider. While banks are trying to lean further into markets they are already in, rural customers need to take advantage of online banking more often.

While in-person transactions include standing in a line or scheduling appointments, online banking is instantaneous and constantly accessible.

Sonali Divilek, head of digital products and channels at Chase, said: “At the branch, people can conduct transactions, including more complex ones, and also get advice. They can talk to a banker about how to grow and build a business, get information on home loans and the processes of owning a home, and other important conversations on how to make their money, support their goals, and their future.”

The rise of neobanks is becoming increasingly popular for customers. These are apps, software, and other technologies that streamline mobile and online banking. They tend to specialize in a specific financial product, like checking or savings accounts.

Around 47% of Americans are using or have considered using a neobank within the past year. These specialized products are especially appealing to younger generations, with 54% of Gen Z adults, 53% of young millennials, and 65% of older millennials saying they have considered using a neobank.

If the current rate of closures continues throughout the year, there will be 1,300 bank closures by 2025.

With the landscape of banking undergoing such transformative changes, customers are encouraged to stay informed and adapt to new ways of managing their financial lives through available online and mobile banking services.