Where Have All of the Bank Branches Gone?

A recent Wall Street Journal report indicated that there have been unprecedented closures of bank branches in the 12 months ending June 2017. Some 1,700 branches were closed that period, the largest one-year decline ever recorded. And, the pace of additional branch closures continued in the second half of 2017.

Obviously, the motivating forces for such branch closures were savings and efficiencies sought by America’s banks and, even more, the fact that fewer and fewer people make use of branches for their every day banking, preferring to do all transactions on line. In fact, banking like most every other routine activity has moved almost entirely to the internet for the vast majority of people.

So it is not surprising that on-line banking has made it possible and profitable for banks to effect considerable savings on personnel and plant. Reducing the number of branches is just good business sense. And, it is certain that numbers will continue to decline at a fairly rapid pace in the years ahead.

But there is a real social cost that attends this reality. And, that is the role banks, especially local branches, have served for a Century or more for the elderly population. For those in retirement, local bank branches have long been a favorite place to go to get out of the house, to meet share stories with friendly tellers, and to meet others. Bank visits and checking on daily mail deliveries are top on the list for many if not most middle class, especially urban, men and women in their late sixties and beyond. That is as true today as it was years ago. Bank branches provided, very simply, vital sources of human contact.

The elderly are not on the internet regularly, and surely not to manage whatever dollars they have. The loss of a key destination, an excuse to get out, and an opportunity to meet and greet others makes a whole lot of sense at the corporate level, but there are social costs for millions of older Americans.

Over time, some banks will recognize that continuing to fill a social and a community function can in fact continue to be a profitable endeavor. Perhaps they will even find ways to make it a richer experience for an aging society.

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