US Could Lose all Bank Branches by 2041

Physical bank branches could be extinct in the US by 2041, according to a new report by Self Financial.

Since 2018, there has been an average of 1,646 branches closing each year in the US. California saw the most closures, losing 1,114 physical branches in the past decade, followed by Florida (1,091) and Illinois (858).

The data comes from the Federal Deposit Insurance Corporation which found that between 2012 and 2022 the number of commercial bank branches across the U.S. decreased from 82,461 in 2012 to 69,590 in 2022 — a decrease of 16%.

Based on the data from 2012 to 2022, Self Financial predicts that if bank branches continue to close at the current rate, there could be no bank branches left in the US by 2041.

States including Connecticut, Maine and Vermont are all predicted to be branchless as early as 2031.

The decline is caused by a variety of factors, including a shift toward online and mobile banking, increased automation in financial services and efforts by banks to cut costs and streamline operations.

The pandemic accelerated this trend, with many customers preferring the convenience of digital banking over visiting branches.

When asked what bank branches are used for, two-thirds use them for making a cash deposit (63.2%), with over half using the buildings to speak to an in-person advisor (56.5%) and making a cash withdrawal (53.6%).

Despite this shift, 39% stated they had the most trust in banks with physical branches but 69.9% of Americans believe that the current banking system needs to change.