If you've noticed a lot of shuttered bank branches lately, you're not imagining things.
Nationwide, banks closed 2,001 branches last year and added 1,234, for a net loss of 767 branches, according to the latest data from SNL Financial. That number represents less than 1 percent of bank branches in the U.S., so if you prefer to bank in person, it's not the end of the world.
But I'm not convinced it's totally meaningless, either. An annual net decline in bank branches is a pretty rare thing. In fact, looking at the Federal Deposit Insurance Corp.'s data on the number of FDIC-insured bank branches nationwide, I only count three years it's happened since 1934, 2010 being the last. Should the FDIC data mirror SNL Financial's data, that would put 2 of the 4 net declines in the last three years.
So what changed?
These aren't exactly boom times for banks. Hundreds of banks have failed since the financial crisis began in late 2008, and I'm sure the banks that acquired the remains of those failed banks closed down a lot branches they didn't need.
But I'd also bet the rise of mobile and online banking is also contributing. Yes, it's probably a little early to declare a trend and start working on my "How online banking killed the bank branch" story. It's entirely possible that people actually prefer branch banking and banks that hold on to their branches will outcompete those that get rid of them. But I do think it's significant that branch growth appears to be falling off just as those technologies are taking off. It adds another data point to the news we got that Bank of America has been quietly "realigning" their network of ATMs by making it 9 percent smaller.
You have to think that banks are reevaluating the necessity of having physical branches in an age when customers can do most of the essential tasks of managing their checking accounts in a few minutes on a smartphone, wherever they happen to be.
What do you think? Are we witnessing the decline of the bank branch? Will traditional banks ever go "branchless"?
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