Finance
Major Banks Shut 55 Branches Nationwide as Digital Banking Dominates
Clear Facts
- Four major banks are closing 55 branches nationwide as they shift focus to online banking.
- Wells Fargo, Chase, Bank of America, and Fulton Bank are among the banks closing branches.
- FDIC data suggests that bank branches could become obsolete by 2041 if current trends continue.
As of September 19, four major banks are shutting down 55 branches across the United States, marking a significant shift from traditional brick-and-mortar banking to digital platforms. This trend underscores the growing preference for online banking among Americans.
“Survey data continues to show that online banking is quickly becoming the standard for how people bank,” said Andrew Murray, Lead Data Content Researcher at GoBankingRates.
“Most Americans find it more convenient than having to go into a bank on a lunch hour or early in the weekends, and as more adults who grew up with smartphones enter the market, its popularity will continue to grow.”
Wells Fargo is among the banks closing multiple branches.
“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,” Wells Fargo stated.
Chase is also reducing its number of physical locations.
“Based on the average closure rate for the last ten years for each area, using the same polynomial regression model, the states that are going to see the fastest level of all bank branches closing are predominantly based in New England,” says Self Financial.
“Connecticut, Maine and Vermont are all predicted, based on our research, to be branchless by 2031.”
Bank of America has already closed 30 branches in Connecticut over the past five years.
“We are super committed to Connecticut,” said Bill Tommins, Bank of America’s president for southern Connecticut.
“We’re growing our head count, we’re actively growing our various lines of business, and we’re focused on market share growth. And we’re here to stay.”
Fulton Bank is also making similar moves.
“While it’s never easy to close one of our financial centers, it’s sometimes necessary after we evaluate factors including overlapping service areas and trends in how customers conduct their banking,” a spokesperson for Fulton Bank told 6abc Philadelphia.
According to Self Financial, FDIC data indicates that if the current trend continues, bank branches may become completely obsolete by 2041.
“Looking at the number of bank branches in 2022, 2012, and 2002, California has seen the highest level of bank closures of any state, with 1,080 branches now closed in the last ten years, followed by Florida (-1,056 closures) and Illinois (-823).”
Branches without physical locations can offer more competitive rates.
“Even though mobile banking is considered more of a self-service style, features like online chat support are frequently offered to assist you if you need help,” said Jessica Morgan, financial expert and founder of Canadian Budget.
“Most new online banks must work harder to compete for your business, frequently offering low to no fees, unlimited transactions and higher interest rates. Using a bank you access from your phone can save you up to a few hundred dollars a year in account fees.”
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