In a recent development in the banking sector, JPMorgan Chase, PNC Bank, and other central banks across the United States have filed to close many branch offices.
This move reflects a growing trend of branch shutdowns witnessed in recent years.
Read More: Americans are feeling the pinch of ‘Bidenomics’
According to data from the U.S. Office of the Comptroller of the Currency, between November 12 and 18, PNC Bank topped the list with 19 branch closure filings across various states, followed by JPMorgan Chase, which filed for 18 closures.
These filings highlight a considerable reduction in physical banking facilities nationwide.
Other Banks Joining the Trend
Other notable banks, including Citizens Bank, U.S. Bank, Bank of America, and Citibank, have also filed for branch closures. These filings cover a range of states, indicating a widespread shift in banking operations.
Also Read: Thanksgiving costs remain much higher than pre-pandemic levels
Long-Term Trend of Branch Shutdowns
This wave of closures is part of a broader trend over the past few years. A National Community Reinvestment Coalition report notes that 9 percent of all bank branches closed between 2017 and 2021, with the rate doubling during the COVID-19 pandemic.
S&P data revealed a net closure of over 2,000 branches for the third consecutive year in 2021.
Rise of Digital Banking
A significant factor behind these closures is the increasing adoption of digital banking, which surged during the pandemic.
The American Banking Association reported that 80 percent of Americans used a mobile device for banking in the preceding month, highlighting the shift towards online financial management.
Cost-Saving Measures and Digital Transition
Switching to digital channels is part of the banks’ strategy to reduce costs.
Physical branch operations are expensive, and most banking transactions can now be done online at a lower price. This shift has led to a decrease in the need for traditional bank tellers and physical locations.
Impact on Communities and Customers
The closure of bank branches has adverse effects on communities, particularly in smaller towns that become “bank deserts.”
The lack of nearby banking services can lead to reduced small business lending and an increase in reliance on unregulated financial services.
PNC Bank’s Closure Plans
PNC Bank has been focusing on cost-saving measures, with plans to shut down many branches as it shifts towards online banking.
This strategy is part of the bank’s broader effort to reduce expenses and streamline operations.
PNC Bank has reported decreased profits and announced workforce reductions as part of its cost-cutting measures. The bank also expects a shrinkage in net interest income due to higher deposit rates and funding costs.
Read Next: Senator Marsha Blackburn Calls for Stronger U.S. Support for Israel Amid Hamas Attacks
