Bank Branches Close in Record Numbers

Wednesday, 29 Jan 2014 11:27 AM

By Dan Weil

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U.S. banks are shuttering their branches in record numbers, as the increasing use of mobile and electric banking is making branch services superfluous.

Banks closed a net 1,487 branches last year, according to SNL Financial. That's the highest number since the research firm began tracking the statistic in 2002, The Wall Street Journal reports.

As of mid-2013, the total number of branches registered 96,339, the lowest since 2006, according to the Federal Deposit Insurance Corp.

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Customers are transacting business online and through their smart phones rather than at branches. "There's less of a need to have branches now," Jeff Harte, an analyst at Sandler O'Neill + Partners, tells The Journal.

Eliminating branches saves banks on real-estate, labor and security costs. That can be quite meaningful at a time when many banks' loan growth is sluggish, The Journal reports.

As for smart phones, some banks allow customers to deposit checks simply by photographing and then e-mailing them. Smartphones and tablets accounted for 9 percent of all Bank of America check deposits in the fourth quarter, up from 7 percent in the third quarter.

Smartphone owners want to do more banking on their devices, according to a global survey from Software analytics company FICO.

A total of 75 percent said they want to check account balances, 59 percent want to receive word of potential fraudulent activity, 53 percent want to make payments from their account and 50 percent want to transfer money between their accounts.

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