The trend: Last year, the US banking industry netted more new branches, per Federal Deposit Insurance Corporation (FDIC) data. But branch closures are back to pre-2023 levels, when they averaged approximately 1,600 per year, per Banking Exchange.
And while these closures started out slower this year, they’re picking up.
How we got here: Aside from the continuous digitization of the industry, fueled by the pandemic, there’s another factor at play.
Merger and acquisition (M&A) activity among banks has trended upward in 2024.
This activity forces the new, merged entities to reassess which brick-and-mortar locations to rebrand or close.
What’s next: The Federal Reserve will likely drop interest rates for the third time this year later this month. This would continue to drive M&A activity—and therefore branch closures—as financing costs drop.
This also means banks that are maintaining or expanding their branch presence have an increasing opportunity to differentiate themselves with in-person services.
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