US Banks Closed Record Number of Branches in 2021

American banks closed a record number of retail branches as the industry consolidates and consumers embrace digital banking.

As CNBC reported Friday (Jan. 21), U.S. banks closed a net 2,927 branches during 2021, with financial institutions shuttering almost 4,000 branches while opening more than 1,000 others.

“We anticipate that the downward trend in branches will continue for a number of years … as more of the transaction-orientated aspects of banking are done digitally,” Gerard Cassidy, head of U.S. bank equity strategy at RBC Capital Markets, said in an interview with CNBC.

Meanwhile, banks are also seeing wave of consolidation, with mergers and acquisitions surpassing $77 billion last year, the highest level in 15 years, according to S&P Global Market Intelligence.

“As consolidation continues and there are overlapping branches when deals are approved, there’s no need to have two branches on Main Street,” Cassidy said.

Wells Fargo led the pack in branch closures last year, shutting down — on net — 267 retail locations, while JPMorgan Chase, number six on the list, opened the most branches, cutting the ribbon on 169 locations amid an expansion.

Read more: Virgin Money Emphasizes Online Presence with 20% Branch Closure

This trend wasn’t confined to U.S. borders. Last October, British bank Lloyds said it would close 48 branches in England and Wales, while another British bank, Virgin Money UK Plc, announced it would close nearly 20% of its branches to boost its digital and mobile presence.

And the trend has continued into 2022 as well. Earlier this month, we reported that Standard Chartered would close about half of its branches in Nigeria as it focused on improving its mobile banking capabilities.

Read more: Standard Chartered Emphasizing Digital With Nigerian Branch Closures

PYMNTS research has found that, since the pandemic, an increasing number of banking customers around the world rely on mobile and/or online banking: 41% of consumers say that they bank primarily via mobile app, while 26% now say they prefer to use their computers.