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The days of banking in a branch are looking more and more like record players: still in existence, but on a decline toward something only an audio aficionado could love.
More proof to back up that long-building trend comes in a new report from data analysis firm Sageworks. The overall number of bank branches nationwide has dropped 3.5% in the past five years, according to the report, from more than 98,000 in 2010 to fewer than 95,000 in 2014. The number of branches, adds Sageworks analyst James Noe, is at a 10-year low.
Large banks have been shuttering branches for years. Bank of America has closed more than 500 branches in the past few years, for example, and PNC recently announced plans to close nearly 200 offices, Raleigh, N.C.-based Sageworks reports. Banks nationwide closed 2,599 branches in 2014 while opening 1,137 new locations, a net loss of 1,462, according to a separate report from Charlottesville, Va.-based SNL Financial. That was just off the net-loss record of 1,487 set in 2013.
One obvious reason branches are being jettisoned is consumers are increasingly banking through mobile and digital methods. Other reasons for the decrease, the report states, are mergers of banks with overlapping markets and a desire to maximize efficiency and earnings.
“This isn't necessarily reflecting turmoil or problems in the banking industry,” Noe says in a statement. “We're actually seeing U.S. financial institutions performing well and seeing their lowest levels of risk, by some measurements, since the recession.”
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