Banks are closing branches.
Dozens of bank branches closed around the country in 2021, and the trend has continued this year. For example, Bank of America recently informed customers that its Tempe location at 1801 E. Southern Ave. is now permanently closed.
Banks are eliminating branches in response. According to S&P Global Market Intelligence, 2,126 bank branches in the United States will close in 2020. By 2021, when a net 2,927 units closed, this was a record. For example, Wells Fargo shuttered 267 branches throughout the United States last year. In Arizona, 26 teams will be shut down by 2021.
Even though the COVID-19 outbreak spurred record-breaking branch closures, McBride insists bank branches aren’t going away. “Branches will continue to be an important element of banking,” he added. However, AARP recommends looking over the next closest thing once your bank branch closes to ensure it is close enough. In addition, AARP recommends switching your account to a new bank if you require branch services.
Bank of America
The Bank of America Corporation (BOA) is an American global investment bank and financial services holding corporation in Charlotte, North Carolina. The bank was created in San Francisco and assumed its current form after NationsBank of Charlotte purchased it in 1998. It is the second-largest bank in the United States, behind JPMorgan Chase, and the world’s eighth-largest bank. Bank of America is among the United States’ Big Four financial organizations. It competes for approximately 10.73 percent of American bank deposits with JPMorgan Chase, Citigroup, and Wells Fargo. Commercial banking, wealth management, and investment banking are its core financial services.
Since the 2008 financial crisis, the bank’s enormous market share, commercial activity, and economic effect have resulted in several lawsuits and investigations involving mortgages and financial disclosures. Since the early twentieth century, its business policies of servicing the middle class and the larger banking community have resulted in a sizable market share. Bank of America has a $313.5 billion market value as of August 2018, making it the world’s 13th biggest enterprise. As of June 2018, it was the 6th largest American public corporation, with sales of $102.98 billion. Bank of America was ranked 25th on the 2020 Fortune 500 list of the largest companies in the United States based on total revenue.
Similarly, Bank of America was rated # 8 in Forbes’ 2020 Global 2000 rankings. In addition, the Euromoney Institutional Investor recognized Bank of America as the “World’s Best Bank” in its 2018 Awards for Excellence.
Expansion since 2015.
Bank of America began organically growing in 2015, building branches in cities where it had previously had no retail presence. They started that year in Denver, then moved on to Minneapolis–Saint Paul and Indianapolis, each of which had at least one of their top four competitors, with Chase Bank accessible in Denver and Indianapolis and Wells Fargo in Denver Twin Cities. The Twin Cities area is also home to U.S. Bancorp, the major non-Big Four competitors.
Bank of America declared an evolutionary expansion of its consumer footprint into Pittsburgh and nearby areas in January 2018 to augment its current commercial lending and investment operations. Before the development, Pittsburgh was one of the major US cities without even a retail presence by any Big Four, with locally owned PNC Financial Services (no. 6 nationally) controlling a dominant market share; this corresponded with Chase making a positive expansion into Pittsburgh. By the conclusion of the fiscal year 2020, Bank of America had surpassed PNC and BNY Mellon to become Pittsburgh’s 16th largest bank by deposits, which would be regarded as very significant given the market dominance of PNC and BNY Mellon. By 2021, Bank of America had risen to 12th place in the market.
BOA plans to close its branches.
Bank of America is gradually shifting to more of an online business model, but would that influence its employees and customers? Throughout the year, the bank has discontinued several branches. It will have shuttered hundreds of sites by the end of 2021. Some components may reopen, while others may not, leaving some customers without a nearby location to visit.
To attract more candidates, Bank of America said in October that it would raise its base salary in the United States to $21. Nevertheless, the efforts have not been very successful thus far, and branches continue to close. This year, the financial institution informed clients that, as certain facilities close, they would like to engage more in online banking. Moreover, as internet banking services increase, it is possible that many more facilities could close by 2022.
BOA closes most branches.
Bank tellers have begun to fade into obscurity. Cash machines began to be phased out some years ago. Face-to-face bank transactions are becoming increasingly rare as a result of online banking. As a result of this, banks have begun to close branches, with Wells Fargo being the American bank that has eliminated the most units.
Where human bankers formerly worked, several branches now have massive teller machines. For example, the mortgage industry has been transformed. Finally, the currency is fast becoming obsolete. Bank branches have several drawbacks for banks. Most are in rented spaces, which are frequently in high-priced locales.
Hundreds of thousands of people are employed by the top banks to provide financial services. The biggest banks have numerous branches. For example, Wells Fargo had 4,894 at the end of 2021. Bank of America has a total of 4,084 locations. These findings are based on an S&P Global Market Intelligence analysis titled “US bank branch closures surged 38% to a new peak in 2021.”
S & P Global Market rated banks in 2021 based on net branch expansions and closings. This comprised about 1,000 new branch openings and nearly 4,000 branch closures. “Low-interest rates made it more difficult for banks to drive revenue, and the COVID-19 epidemic significantly reduced client visits. Wells Fargo had the most branch closures, with a combined value of 267 sites.
Every central bank in the United States had a net decrease in branch locations. (Ask if Wells Fargo has the worst reputation in America.) Only three of the listed US banks that closed and opened branches in 2021 had net openings, while 24 eliminated more than they opened.
According to the S&P Global Market report, “JPMorgan Chase & Co. established so many branches in 2021 with 169 new sites, greatly surpassing the No.2 bank, Bank of America Corp.” Bank branches are disappearing, but they will not be gone entirely.
Why does it want to close the branches?
The bank is entirely and momentarily shutting branches around the United States, mainly owing to the persistent COVID-19 pandemic and personnel shortages. Staff shortages have generated issues in every industry. As a result, companies have been attempting to develop ways to persuade individuals to apply for vacant positions while still securing and affording the workers they already have.
Millions of individuals have resigned from their jobs this year, whether due to having an excess of cash from prior unemployment compensation, tax credits, PPP loans, or trading stocks and cryptocurrency.
Bank of America anticipates that some branches may reopen after the Christmas season, but many will close forever. Numerous states have units that will be closed temporarily or permanently this year or in 2022. In addition, it is the only BoA in multiple U.S. cities, leaving local consumers without the need for a local branch to visit. Other banks, such as Wells Fargo and Chase Bank, are experiencing similar difficulties and have closed several of their units.
Various banks are removing some of their goods and services to help them regulate their budgets. For example, Wells Fargo faced outrage in July when it declared that the bank would no longer extend credit lines and would cancel current clients’ lines of credit.
Closing current clients’ credit lines would have had a detrimental effect on their credit ratings. As a result, it’s hardly surprising that Wells Fargo quickly changed its decision and maintained credit lines available for present and future clients.
Temporary closing of branches
However, not all of the branches are permanently closed.
When a financial center is temporarily closed, we will try to reopen it as quickly as possible. In an email to the Daily Post, Colleen Haggerty, a Bank of America spokesperson, said that “our Los Altos financial center on San Antonio Road, for example, will reopen later this week.”
The following branches are temporarily closed in the area:
- 1875 Virginia Avenue, Redwood City
- Redwood Shores Parkway, 250 Redwood Shores Parkway, Redwood City.
- Menlo Park, 633 Santa Cruz Avenue.
- Menlo Park, 2180 Sand Hill Road.
- Los Altos, 227 San Antonio Road.
- 901 Fremont Ave., Los Altos
- Mountain View, 384 San Antonio Road.
According to the bank’s website, just one Bank of America branch in Palo Alto looks to be permanently shuttered, and that is at 395 Quarry Road, across the street from Lucile Packard Children’s Hospital. According to the firm, that branch will close on December 7.
Mode of operation for online businesses
Many financial organizations are shifting to predominantly providing services online. While conventional financial institutions have offered online services for many years, they lack some of the modern elements that internet banks have included in their business models.
Axos and Ally are some of the country’s leading online banks. In recent years, thousands of new clients have joined them, particularly during the COVID-19 epidemic.
Axos and Ally provide features and services that traditional banks do not, such as slightly elevated interest checking accounts, no OD or inadequate fund penalties, ATM charge refunds, and excellent mobile app usability. In addition, ally made strides in June when it declared that it would no longer levy overdraft fees. It was the first big bank in the United States to do so.
Internet fintech platforms have become formidable rivals to traditional banks such as Bank of America, along with entirely online banks. Platforms such as PayPal and Cash App provide consumers with more internet accessibility than conventional banking, and transmitting money may be straightforward.
Many small companies and sellers are increasingly willing to accept payments via Cash App and PayPal. Both services also provide early direct deposit, allowing customers to get their work checks sooner than a standard bank account.
These are purely the opinions of the author based on observations and analysis of financial platforms and a study of public reviews and ratings on the news of how the bank of America closed down its local branches permanently and why. Excerpts from various sources have been used to clarify the facts in this article. A glossary of all the sources used can be found at the end of the article. This article is for educational purposes only and is not financial advice.