According to the Federal Deposit Insurance Corp., banks decreased their in-store branches by 10.7% in the year ending June 30. The decline rate for other branches was 1.4% during that time.In 2021, the coronavirus incident hastened the acceptance of web and mobile banking, resulting in a more rapid closure rate of branches than before. PNC, Citizens Financial and U.S. Bank have all closed many of their in-store locations at Safeway and Stop & Shop.
U.S. banks are shuttering branches located within supermarket chains at seven times the rate of other locations due to profit pressures and the switch to digital channels by customers. According to the Federal Deposit Insurance Corp., 10.7% of in-store branches were closed in the year ended June 30. The closure rate for other branches was 1.4% in the same period.The majority of in-store branches are operated by regional banks, whose profitability was impacted by Silicon Valley Bank's March collapse. During the last 12 months, PNC, Citizens Financial, and U.S. Bank closed the most in-store branches at chains such as Safeway and Stop & Shop. Of all retailers, Walmart houses the most bank branches with 1,179, per an S&P Global report.The pandemic expedited the switch to mobile and online banking, causing the closure of nearly 18% of in-store branches and 3.1% of other locations in 2021, per S&P Global. Banks are realizing that branches need to be used as a place to attract customers for wealth management accounts, credit cards, and loans rather than simply a place to withdraw money, which favors traditional branch locations.Since 2021's peak, the pace of closures has decreased, although it is still higher than pre-pandemic levels. For instance, in 2019, banks closed 4.2% of in-store branches and 1.7% of other locations.The economic effect of higher funding costs, as customers have moved balances into higher-yielding money market funds, has also impacted banking. The FDIC noted a 15% drop in deposits from in-store branches and a 4.7% decline in deposits at other branches for the year ended June 30.
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