FINANCE
Over 1,600 bank branches are closing in the U.S. each year, data shows
Phsical branches could be extinct by 2041 if current closure trends continue, according to a new report.
American banking is undergoing a dramatic transformation, marked by a steady decline in physical bank branches across the country. Since 2009, the number of bank branches in the United States has fallen from nearly 100,000 to fewer than 80,000 today.
This trend, accelerated by the rise of digital banking and the covid-19 pandemic, has led to a significant reshaping of how Americans interact with their financial institutions.
Self Financial has analysed banking data going back to 1934 to chart the closure of these highstreet institutions. They found that, since 2018, there has been an average of 1,646 branches closing each year.
| Year | Total Branches |
|---|---|
| 2022 | 69,590 |
| 2021 | 70,314 |
| 2020 | 72,756 |
| 2019 | 74,721 |
| 2018 | 76,772 |
| 2017 | 77,821 |
| 2016 | 79,107 |
| 2015 | 80,537 |
| 2014 | 80,960 |
| 2013 | 81,658 |
| 2012 | 82,461 |
If current trends continue, physical bank branches could be extinct in the United States by 2041.
The study in more detail
California has experienced the highest level of bank closures, with 1,114 branches shutting down in the last ten years. Florida follows closely with 1,091 closures, and Illinois ranks third with 858 closures. This trend is not uniform across the country, however, as some Midwestern states still maintain a higher ratio of branches to population.
Despite a population of just 1.4 million people, Hawaiians find themselves sharing the fewest bank branches, with 9,797 people per branch.
Nebraska has the most brick-and-mortar banks per capita with 2,272 people per bank. Despite nationwide closures, Nebraska’s Bank Association remains confident that its 168 banks across the state will remain open, arguing that its local focus means they still have a place.
The closure of physical branches has far-reaching consequences. Reduced access to in-person banking services, particularly affects older, disabled, and lower-income communities. This creates ‘banking deserts’ in certain areas, where those who struggle the most cannot access their bank, crucial in an era so dominated by finance.
What do Americans think of bank closures?
Self Financial also conducted a survey of 1,046 Americans for their thoughts on bank closures. When asked what bank branches are used for, nearly two-thirds of Americans use them for making a cash deposit, with over half using them to speak to an in person advisor or to make a cash withdrawal.
For many, there remains a space for banks though as more and more banking turns digital these numbers will fall.