Bank branches are in a slow decline. 50 years ago, the only way for businesses and individuals to do their banking was to walk into a branch of their local bank or speak to their bank manager via telephone. Most people knew their bank manager very well – if they needed a loan or a mortgage, their manager would have enough information at hand to make a considered decision. Today, online banking has snowballed, and we are far more likely to do our banking via an app or website interface.
A Pattern of Branch Closures
In the UK, the percentage of individuals using online banking has risen from 30% in 2007 to 63% in 2017. The situation is very similar in the US. It’s becoming increasingly obvious that we much prefer to do our banking online, and banks are beginning to respond to these changes.
Wells Fargo announced at the beginning of the year that it planned to close 800 more branches by 2020. A report in the Wall Street Journal published in February this year found that branch closures were occurring at the fastest pace ever recorded. 1700 branches closed their doors in the year ending June 2017, despite the fact the US economy is growing.
Big banks began closing branches during the recession in a bid to save money, but the pattern has continued. Banks usually look at foot traffic and running costs when they make a final decision about whether to close a branch. In some towns, there are no regional bank branches left.
Some would argue that local branches are no longer relevant. After all, we are living in a digital age where we can log-in to our bank and make transactions at the click of a button or swipe of a touchscreen. It’s so much easier as we can do our banking 24/7. But, whilst this works perfectly well for many individuals and businesses, there are plenty of times when speaking to an advisor in person is more comforting.
For example, if your small business is considering investing in some new financial services to streamline your receivables and payment processing, you would probably feel better if you could talk to an advisor in person. Of course, there are many good reasons why online financial services solutions save time and money but knowing you can make an appointment to speak to someone in your local branch is comforting nonetheless.
Seniors Rely on Local Bank Branches
Not everyone has access to online financial services such as banking. Their internet may not be reliable, or they don’t know how to use a computer or smartphone. This is especially true of the older generation, many of whom rely on regional bank branches for their everyday needs.
Digital financial services may be gaining traction, but banks need to understand that customers don’t always want – or have the ability – to manage their money online. Rural branches don’t always get a lot of traffic, but they are a vital resource in remote communities. After all, not everyone can drive 30 miles to deposit a check.