What is the reason for Bank of America branches closing?
Bank of America, the second-largest bank in the United States, continues to close branches in the country. Clients are abandoning brick-and-mortar offices.
Bank of America is one of the institutions that have been shuttering their branches this year, and this is part of a continuing trend as banks have been closing locations at a rate that has not been seen since 2008. This month, Bank of America, the second-largest bank in the country, shut down a number of its offices.
The last year that the number of bank branches increased was 2009, and there was a total of almost 100,000 all over the US at that time. 14 years later, there are now less than 80,000, according to data from S&P Global Market Intelligence.
READ ALSO: What are the best interest rates for a home and which banks offer them?
What is the reason for Bank of America branches closing?
One obvious culprit for the closures is the rise of online banking. Clients are increasingly becoming more inclined to use online platforms, with 78% of adults in the country expressing that they prefer to make their transactions using the financial institution’s website or a mobile application.
Big banks have been investing in technology, and the improved online customer experience and expanding number of services offered have changed the behavior of clients, making them do away with in-person bank transactions. Customers feel more of a sense of control when they handle their own financial operations through online banking.
READ ALSO: At a glance: US bank branches closing in the coming weeks
The role of covid-19 in bank closures
The shift to using digital products and services was already taking place since 2010, but the process was accelerated by the covid-19 pandemic, when banks implemented social distancing guidelines and encouraged their customers to attend to their banking needs online. In 2021, banks closed almost 18% of their branches that were located within supermarket chains, and 3.1% of all their other locations, according to CNBC.
Bank mergers and acquisitions have also contributed to the branch closures, since these movements typically result in down-sizing and cutting expenses on redundant staff and facilities.