The rise in digital and online banking hasn’t deterred banks in the U.S. from keeping their brick-and-mortar locations running.
Financial Times reported that just one in 30 bank and credit union branches has been forced to shutter its doors since 2009, despite the massive surge in digital FinServ and a subsequent drop in transactions completed by the physical locations.
According to reports, the workload at bank branches has declined by about 10 times the speed at which locations are closing, the publication noted, citing statistics from consultancy firm Bancography.
The drop in business for physical bank locations will come as no surprise, especially for FinTech players.
“If you think about the viability of the branch, the question has to be: Are customers visiting? We have a rapid decline in visits,” said the founder of mobile finance app Moven, Brett King, in an interview with FT. “People just aren’t using them as much as they used to.”
But that doesn’t mean financial institutions are ditching their retail locations.
The number of branches open is at its lowest level since 2006, reports said. Still, that decline amounts to only about 3 percent of all locations, even though transactions carried out by these locations have declined by more than one-third in the same period, reports explained.
Bank of America Finance Director Paul Donofrio told reporters that these branches still hold a purpose in today’s world; it’s just a different purpose than it was before.
“It’s more about they’re coming there because of some life event,” he said, “not for everyday transaction banking. They need to start saving for their kids’ college, or they need a mortgage or a credit card.”
Bank of America has reportedly reduced the number of its retail bank locations by 23 percent since 2011.