Bank tellers have started to become a thing of the past. Years ago, cash machines began the process. Online banking pushed it even further forward. Shortly after, people could bank from their phones. Today, some branches have huge teller machines where human tellers once worked. These can take deposits, which include huge ones from businesses.
Even the mortgage business has been revolutionized. Products from operations like Rocket Companies allow consumers to go through the entire mortgage process online.
Finally, cash is almost a thing of the past. The day when humans collected paper money and coins has come and gone.
Bank branches have several disadvantages for banks. Some are in rented locations, often located in expensive areas. These must be cleaned, heated, and cooled. The most expensive part of these physical locations is the cost of people. The largest banks employ tens of thousands of workers to perform these services.
As might be expected, the largest banks have thousands of locations. Wells Fargo, for example, had 4,894 at the end of 2021. Bank of America had 4,084. JPMorgan Chase had 4,842.
A recent Bloomberg headline read “Banks Set Record for U.S. Branch Closures As Pandemic Took Toll”. The Bloomberg story was based on an S&P Global Market Intelligence study titled “US bank branch closures increase 38% to new record high in ’21”. The primary conclusion of the research was: “On net, accounting for openings and closings, U.S. banks shuttered 2,927 branches, according to S&P Global Market Intelligence data. That included more than 1,000 branch openings and nearly 4,000 branch closings.”
Low interest rates made it harder for banks to make money, and the COVID-19 pandemic sharply curtailed customer visits.
Wells Fargo shut down the most branches with a net total drop of 267 locations. Much smaller U.S. Bank had 257 net closures. Every large bank in America had a net drop in branch locations.
While all banks closed more branches than they opened, several expanded footprints in some markets. The S&P report pointed out: “JPMorgan Chase & Co. opened the most branches in 2021 with 169 new locations, significantly outpacing the 53 openings for the No. 2 bank, Bank of America Corp.”
Bank branches may be dying, but they are not entirely gone yet.
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