The Mass Exodus of Bank Branches

Welcome to the 21st century of the banking industry. As you might have noticed, banks are closing branches faster than ever before. As technology changes, fewer customers are using tellers for their transactions. With online banking and ATMs gaining popularity in the last decade, brick and mortar banks are becoming less profitable. Many closings are related to the falling foot traffic in bigger cities and surrounding suburbs around the country. Some large regional lenders are leaving rural areas altogether.

In 2009, the number of bank branches in the US peaked; however, when the financial crisis hit, branches began to close to save money. The trend continued because of the low interest rates and higher regulatory costs associated with the banking industry, during the downturn. Over time, major lenders realized that they could retain the same level of deposits, with fewer locations, due to the shift toward mobile banking and ATM usage. The shift in the industry toward the evolutionary digital climate has helped some banks reach record profits.

In the past year, the number of branches in the US shrank by more than 1,700 locations. While regional lenders have only began accelerating their closings more recently. The sharpest cuts have come from the larger institutions, such as, Capital One Financial Corporation, SunTrust Bank, and Regions Financial Corporation. While the largest banks, such as Citigroup and Bank of America began closing branches years ago. The mass closings of bank branches are following the financial crisis, making this the biggest decline in recorded history, as well as the longest stretch of closings since the Great Depression.

The larger institutions are branching out into new markets and bigger cities, where they previously did not have branch locations. However, they are closing-up shop in many rural communities because these rural banks are not as profitable. This is causing long time clients, in these tertiary markets, to move their business to smaller local banks or they are forced to drive long distances to get to the closest branch, for things that they cannot do at an ATM. Banks like PNC are replacing their previous fully staffed branches with ATMs in these rural markets to retain customers, while cutting down on the costs of associated operation.

The retail banking industry has been undergoing a profound change, and is looking for high-tech, sophisticated more urban locations for the future. Each bank carefully examines the deposit levels and commute time between locations when deciding which branches to close. The banking industry is quickly evolving to remain profitable, by operating efficiently and effectively.

Clift Commercial and Clift Marketing Inc have been highly effective in successfully selling large portfolio bank locations, in these complex tertiary markets.

Source: https://drudgenow.com/article/?n=0&s=2&c=1&pn=Anonymous&u=https://www.wsj.com/articles/banks-double-down-on-branch-cutbacks-1517826601

All feedback and comments are welcome! Ashley Phillips is the Digital Content Manager at Clift Marketing Inc; CRE specialists in tertiary markets, specializing in the banking industry. For more information, visit our website www.cliftmarketinginc.com. For further contact, Ashley can be reached at 910.695.0884 or ashley@cliftmarketinginc.com.