Bank of America Closing Two Rural Branches
America’s second-largest bank is continuing to close its underperforming branches. Bank of America Corp (NYSE:BAC) has announced two branch closures in California this week: one in Lakeport and another in Ukiah.
The two branches were serving rural populations that have recently witnessed a number of bank branch closures as more customers take their banking online.
According to Bank of America spokesperson Collen Haggerty, the branches will close by November 11 because they were no longer financially viable. A statement e-mailed by Haggerty said, “We constantly adapt our financial center network to fit clients’ changing needs and habits, and this decision is driven primarily by less foot traffic inside centers as customer banking behaviors gravitate to using more online and mobile banking.”
Following the closures of these branches, residents of the two cities will see further reductions in the number of local bank branches. Lakeport and Ukiah both have large percentages of residents who are either unbanked or underbanked.
Like all industries within the broader American retail sector, the retail banking industry is facing a decline. The rise of technology, particularly the Internet and smartphones, has disrupted the banking sector. A growing number of Americans are choosing to purchase goods and services online via their digital devices. This has resulted in a decline in foot traffic at physical locations.
Retailers, including banks, are finding it more viable to shut down brick-and-mortar branches and conduct more of their business digitally.
Earlier this year, Bank of America’s major competitor, Wells Fargo & Co (NYSE:WFC), also announced 450 branch closures across the country. Likewise, JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc (NYSE:C) have also closed hundreds of branches in the past two years.
The banking industry has witnessed a shifting trend in which millennials are choosing to conduct their banking transactions through mobile banking. All banks have been restructuring their operations to meet the needs of millennials, who account for the biggest chunk of their customer base now. Collectively, the total number of active branches for the four above-mentioned banks has shrunk by thousands in recent years.
“Bank of America closing branches in Lakeport, Ukiah,” The Press Democrat, July 28, 2017.
“America’s biggest banks are closing hundreds of branches,” Business Insider, October 23, 2016.