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.
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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.
FAQs
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.
Why is Bank of America closing so many branches? ›
Banks often pursue acquisitions of competitors to cut expenses on overlapping staff, services and facilities. The savings support profits. In recent years, closing branches has often proven integral to deal-related cost-cutting.
Why Bank of America branches are disappearing? ›
Customers are increasingly choosing digital banking experiences, which has made it difficult for traditional banks to sustain their physical branches. Moreover, for many banking institutions, maintaining physical branches is no longer profitable and comes with high costs.
What is the real reason banks are closing? ›
Bank Closures in 2023
The increase in mobile banking use, inflation and interest rates, and real-estate struggles all contributed to why 2023 experienced so many banks shutting their doors.
Why are banks closing branches? ›
The banking trade body UK Finance said the change in customer habits – with increasing numbers going online and using mobile banking – meant banks “had to make difficult decisions about maintaining their branches”.
Is Bank of America in danger of closing? ›
While there are always risks involved in the banking industry, Bank of America does not appear to be in imminent danger of collapse. However, customers and investors should always monitor the bank's financial health and risk profile and stay informed of any changes or developments that may affect the bank's stability.
Is Bank of America laying off? ›
The U.S. bank has become the first large global bank to downsize its regional investment banking operation in 2024, after a wave of layoffs across the industry in 2023 as a weaker China recovery and rising geopolitical tensions drove away foreign investors.
Is Bank of America having problems? ›
No, we are not detecting any problems with Bank of America right now. The last outage detected for Bank of America was on Friday, April 12, 2024 with a duration of about 31 minutes.
Why did Bank of America get in trouble? ›
In July 2023, the CFPB and the Office of the Comptroller of the Currency (OCC) ordered Bank of America to pay over $200 million for illegally charging junk fees, withholding credit card rewards, and opening fake accounts.
Which banks are closing in 2024? ›
NatWest, RBS and Ulster Bank to close at least 100 branches in 2024/25 – here's the full list, plus alternatives. NatWest, Royal Bank of Scotland (RBS) and Ulster Bank, which are all part of the NatWest Group, will shut at least 100 of their bank branches in 2024/25, after the Group announced a further 18 RBS closures.
You should only take your money out of the bank if you need the cash. In the bank, cash is less vulnerable to theft, loss and disaster. And depending on the bank account, you could be earning interest on your cash that you won't be earning if it stays under your mattress.
What bank account can the IRS not touch? ›
Any bank accounts that are under the taxpayer's name can be levied by the IRS. This includes institutional accounts, corporate and business accounts, and individual accounts. Accounts that are not under the taxpayer's name cannot be used by the IRS in a levy. Levies can impact property and assets other than accounts.
Are credit unions safer than banks? ›
Generally, credit unions are viewed as safer than banks, although deposits at both types of financial institutions are usually insured at the same dollar amounts. The FDIC insures deposits at most banks, and the NCUA insures deposits at most credit unions.
What happens if my bank branch closes? ›
If your local bank branch closes, you might consider searching for a nearby branch, finding a convenient ATM, banking online or switching to a different bank altogether.
How many US banks are in danger? ›
Consulting firm Klaros Group analyzed about 4,000 U.S. banks and found 282 banks face the dual threat of commercial real estate loans and potential losses tied to higher interest rates. The majority of those banks are smaller lenders with less than $10 billion in assets.
How much money should you keep in the bank? ›
Most financial experts suggest you need a cash stash equal to six months of expenses: If you need $5,000 to survive every month, save $30,000. Personal finance guru Suze Orman advises an eight-month emergency fund because that's about how long it takes the average person to find a job.
Is Bank of America closing in 2024? ›
This list of Bank of America closures in California is the latest in a series of closures that started in 2023. The hardest-hit region is the San Francisco Bay Area, which will see more than two dozen closures by the end of 2024.
Which banks are closing the most branches? ›
Now the nation's largest banks seem to be rushing to shut them down. Over the past 12 months, Wells Fargo has closed 258 branches, JPMorgan Chase 165 and Bank of America nearly 100, according to S&P Global Market Intelligence.
How many Bank of America will close? ›
BofA expects to reach up to 138 branch closures in 2024, signaling that banks' push to rationalize their physical footprints is a long way from being over. The trend of consolidating branches began around 2010 and has since accelerated following ongoing challenges and labor shortages from Covid-19.
