Are bank branches becoming extinct?

Bank plaque
  • Bank branches can offer personalized help with complex transactions.
  • Branches open or close to meet local demand for banking services.
  • Some branches charge a fee to deposit large quantities of loose coins.

The number of U.S. bank branches that were open for business at the end of 2009: 99,564.

Yet despite that large number of locations, the use of branches as a preferred way to conduct banking business is on the wane, according to a survey by the American Bankers Association, or ABA, a trade group in Washington, D.C. The survey, conducted in August 2009, found that online banking had surpassed branch banking as preference for the first time, though by a small margin.

Yet bank branches aren't on their way to extinction, says ABA spokeswoman Carol Kaplan. Rather, branches will continue to exist as an option for bank customers.

"Banks are a service industry," Kaplan says, "and they are going to provide access to numerous channels to keep customers happy."

Bank branches offer in-person service

Some people prefer to go into a branch to conduct most or all of their banking business. This preference is especially prevalent among those who are older than 55, according to the ABA survey.

Frequent bank-branch visitors feel more secure having face-to-face interaction, need help to conduct complicated transactions or want the additional service they can obtain in person, Kaplan says.

Other people, especially those of younger generations, tend to use multiple channels for different banking services, according to Anne Pace, a spokeswoman for Bank of America, which has the nation's largest branch network at 6,000 locations called "banking centers."

"Customers want to pay their bills (online) for convenience. They are using mobile banking to check their balances. They are using ATMs to deposit their checks," she says. "The banking center is becoming more and more a place not only for basic transactions, but for people to discuss complex issues."


A visit to a branch may also be in order for other reasons: to pick up foreign currency, access a safe-deposit box, purchase a money order, deposit a large sum in cash or apply for a loan.

Branches offer specialty services and accounts

Bank branches exist to provide services, so it's a good idea to find out what a bank offers. Many customers don't know that banks offer wealth management services and can act as legal fiduciaries. Banks also offer specialty accounts such as trust accounts, college education funds and health savings accounts, or HSAs.


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