US Bank branches extinct by 2034, study finds
  • Bank branch numbers in the US have fallen by 6.5% since 2012

  • Based on current trends the number of physical banks could fall to fewer than 16,000 by 2030, a number not seen since 1965

  • Using these figures, 2030 could see over 22,600 people per bank branch, an increase of 18,000 people compared to 2020

  • Current trends suggest that all bank branches could be closed by 2034

  • The number of citizens per bank branch has risen 13.2% since 2009

  • Maryland had seen the highest closure rate of any state (12.52%), while Florida has seen the most closures of any state (529) since 2012

Analysis of bank closures in the US has revealed that physical bank branches are set to be wiped out by 2034 if they continue on current trajectories. The new study analyzed over 8 decades of official government data from 1934 up to 2020 to discover changes in banking and how this has affected the average American.

The study found that since 2012, the US has lost over 5,400 bank branches in a consistent shift towards online support as bank branches close across the country. This contrasts the 30% increase the country saw in branches from 2000 to 2012, from 63,740 in 2009 to 83,060.

Since 2012, the US now loses an average of 902 bank branches each year, with this set to increase in the next decade.

The study also took regional data to analyze the number of branches per state and found that since 2012, 40 states have experienced a net decline in the number of bank branches open in their state.

Maryland had seen the highest closure rate of any state (12.52%), while Florida has seen the most closures of any state (529) since 2012.

In terms of the number of bank losses since 2012, six states have lost more than 300 banks in the past 6 years, those being; Florida (529), Illinois (395), Pennsylvania (379), Michigan (330), California (325) and North Carolina (310).

You can see the full data per state in an interactive map using the following link:

The study also surveyed 1,114 US residents on the state and future of banking, and their attitudes towards banking in a branch.

Overall, 46% of Americans believe the current way we bank needs to change, despite this, 47% say they don’t trust new systems like online-only banking. Further to that, 1 in 8 (13.2%) were not aware that you could bank without a physical branch.

Over 86% of the survey sample said that they had, at some point, tried online services for banking. With that, the poll also asked what the publics’ opinions were on key services offered by banks.

Over half (54%) said that physical banks made it easier to access cash, and half (50%) said it was easier to get financial advice, 37% claimed they felt it had better security than online-only alternatives.

Almost 3 in 10 (29%) said they visit their physical bank monthly, with 12% visiting more than that, on a weekly basis.

When asked what may stop people from using online-only banks, security (45%), lack of human interaction (43%), lack of free ATM access (34%), and concerns regarding federal insurance (28%) were top of the list for savers.

Almost 7 in 10 (69%) did say however, that 24/7 online access would appeal to them, whilst only 38% said that a mobile app is important.

Despite a clear preference for in-person banking, over half (55%) are confident online-only banks will outnumber physical branches in the next two decades.

The study also sourced expertise from a range of experts in the sector. They agreed that the following changes will happen to banking in the coming years:

  • Less face to face interaction, with replacements being artificial intelligence

  • AI financial advisors will cut waiting and approval times for products

  • There will be more ATMs across the country which will offer more services

  • Biometric security will become more normalized and adopted in more places

  • Bank branches will reduce as AI replaces them

  • Smart technology will feed data into financial products for the public

  • Mobile apps will be able to offer more banking services

  • Feed will be reduced due to reduced overheads

Eric Taylor, director of UX research at Varo, who supplied supporting commentary to the study added:

“When the US economy opens up again and starts to rebuild after the COVID-19 pandemic, traditional banks will be facing steep losses from bad loans, sketchy investments, and decreased deal flow. Income will be reduced across most of their business lines. The economic situation will be dire, and consumers will be hurting.  In extremis, some small and mid-sized banks will fail, while others, especially the larger, more well-connected ones, will receive taxpayer-funded bailouts.”

“Banks will have to cut their operating costs, and the deeper the crisis, the more operating costs they will have to cut. Closing physical bank branches will be an obvious way to improve their balance sheets, so I expect that’s what they’ll do.”

There’s no doubt that the Coronavirus outbreak caught the world off guard, and stay-at-home and social distancing measures fundamentally changed the way we interact with our communities and our finances.”

While the team at competitor bank N26 shared:

“For the past few years, user behaviour (particularly among Millennials and Gen-Z) was already shifting more and more towards phones and mobile devices.”

“However, the pandemic forced adoption of mobile technologies ona much larger scale to people of all ages as people had to find ways to work, learn and bank entirely online. People want their mobile banking experience to be simpler, more intuitive, and personalized”

For more details and to view the full study with interactive data visualizations please see here:

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