Not too long ago, a trip to the bank was a usual item on everybody’s errand list. But times, they are a-changin’ – and faster than ever. Not only has visiting banks in person become less common, it’s also increasingly less possible, as banks are steadily closing branch offices. This isn’t anything new – the number of brick-and-mortar locations has dropped every year since 2012. 2020, however, was an outlier: The number of branches nationwide absolutely plummeted.
U.S. banks closed a total of 3,324 branches in 2020, while opening just 1,040, according to S&P Global Market Intelligence. The result was a record of 2,284 net closings in one year. (To put that number, which doesn’t include temporary closings due to COVID-19, into context, 1,391 branches closed in 2019.) The trend only continued in 2021. If things stay the same, physical bank branches could be extinct in the U.S. as soon as 2034.
This disappearing act begs two questions: Why are banks closing branches in the first place and what should you do if your bank branch closes?
Why Are Banks Closing Branches?
Like nearly every aspect of our lives, banking is moving further and further into the digital space. Indeed, the driving force behind the upswing in bank branch closings is the increased use of online and mobile banking. Customers can complete most, if not all, of their financial transactions digitally, which creates a waning demand for branch offices.
When banks further compare the cost of operating a brick-and-mortar location to simply offering their services online, the choice to close branches becomes even easier.
How Will I Know if My Bank Branch Is Closing?
Of all the factors surrounding a bank branch closure to be concerned about, learning of said closing should be at the bottom of the list. Banks are legally required to inform customers of a branch closing. The Federal Deposit Insurance Corporation Improvement Act of 1991 states the bank “must mail the notice to the customers of the branch proposed to be closed at least 90 days prior to the proposed closing. The institution also must post a notice to customers in a conspicuous manner on the premises of the branch proposed to be closed at least 30 days prior to the proposed closing.”
Additionally, the bank must either inform customers where they can obtain services after the branch closes or list a telephone number customers can call to get that information.
What Should I Do if My Bank Branch Closes?
Find the Nearest Bank Branch
If you’re accustomed to banking in-person and your home branch shutters, there’s no need to panic. You have a number of options at your disposal. The easiest solution is to simply find your bank’s nearest branch location. If it’s within a reasonable distance, there’s no need to alter anything else about your banking.
Odds are this option will be available to you. Most branch closures are occurring in saturated urban markets, according to the American Bankers Association Banking Journal. These areas typically have a higher density of branch locations, so if one closes, another one is likely nearby.
Check Local ATM Availability
If there’s not another branch location near you, or it’s too far to visit as often as you’d like, ask yourself if most of your physical banking transactions can be done through an ATM. If so, you may not need a branch. Many bank ATMs allow you to not only get cash, but deposit cash and checks, make transfers between accounts, and check account balances.
Do some research to see how many ATMs your bank has nearby. You can likely get by even if there is just one. You’ll also want to learn if there are nearby ATMs outside of your bank’s network you can use without a service fee.
Switch to Online Banking
As we’ve seen, your bank branch closing is a sign of the times — a trend that won’t likely go away anytime soon, if ever. Therefore, you could use it as the perfect motivation to switch to online banking.
Almost all major banks offer their services online, so switching over will require setting up an online account, which can be done in minutes. If available, you can also download your bank’s app, allowing you to access your account from your smartphone or tablet. Technology has jumped leaps and bounds in recent years; once you’re used to it, you could very well find online banking easier than anything you’ve done at a brick-and-mortar location. A perfect example: the ability to deposit a check simply by taking a photo of it on your phone.
Learn about how AAA and Discover can fulfill all of your online savings needs.
Find a New Bank
If you’ve exhausted all your other options to no avail, you can always switch to a bank with a local branch. It’s a more laborious process, but worth considering if a physical branch location is important to you.
Don’t be fixated solely on proximity. Research the banks in your area to see which one best fits all your financial needs.
Do you prefer banking in-person or online? Is having a branch nearby important to you? Let us know in the comments below!