Bank branch closures continue to attract media attention. Citizens Bank is closing 15 branches nationwide, making it the most recent banking institution to close physical sites.
Citizens Bank justified its decision in an emailed statement explaining, “We’ve been on a journey at Citizens to evolve how our customer’s bank with us, and we continually review customer patterns to evolve and adjust branch strategy across our network.”
The rationale behind a downsizing strategy is not new; most banks have been looking into ways to improve their financial soundness by closing unnecessary or underperforming physical facilities. “About these closures, we look forward to continuing to serve customers through neighbouring branches, as well as through our online and mobile banking platforms,” the bank said in its statement. Along with continuing to develop digital and mobile capabilities, we are also dedicated to our branch network and have plans to open standalone branches over the next years.
The biggest change from the approach a few years ago, which only comprised closing down locations, has been this. Although closing rates may have increased due to the pandemic, not all transactions can be completed online.
There were, admittedly, too many bank branches in some places due to the proliferation of these establishments, particularly in urban regions where the expense of operating them made them unprofitable. This meant that many of these “extra” branches were rendered obsolete with the early rise of online banking and ATM transactions. Operating expenses were reduced, productivity was raised, and there were still enough branches to handle any in-person needs that clients could have had.
However, many institutions were forced to improve their internet systems in order to keep the economy running, and the pandemic gave banks the chance to drastically reduce their workforces without facing any repercussions. Locations were abandoned as leases came to an end, and staff gradually moved or went into unemployment or work from home. This choice was also influenced by the virus’s continued decline in cash.
However, some regions quickly developed into what is today referred to as a banking desert, where there are no branches within a reasonable driving distance and clients must switch banks to get their needs satisfied because many transactions still require face-to-face interaction with a teller. To service those bank desert regions, the new bank strategy calls for branch consolidation rather than complete closure and the creation of new branches in areas without existing ones that are accessible by car.
