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Once I was a child, the Bank of America branch in my hometown was positioned next to a Burger King, an Einstein Bros. Bagels and a Chili’s. This was notable to Young Julia because anytime my grandma needed to stop by the bank while running errands, I got a snack. And by chance for me, she all the time needed to stop by the bank.
So imagine my disappointment once I grew up and realized frequent bank visits weren’t going to be an element of my on a regular basis life. For several years now, most of my banking has been done on my iPhone — nowhere near a brick-and-mortar branch (or delicious fast-food restaurants, for that matter).
Not only do I actually have to make my very own snacks, but I even have lingering FOMO: Surely my grandma was getting something out of all those pit stops on the bank. I just do not know what.
Are there any advantages to doing my banking in person?
Let me start by explaining the landscape. It’s an odd time for banks: Federal Deposit Insurance Corporation records show that in 2012, the U.S. had 82,965 bank branches, but by the point the pandemic began in 2020, just 73,107 were still operating. Essentially the most recent data, from 2023, puts the variety of branches at 69,997.
All those closures have not gone unnoticed. The news is dominated by scary-sounding claims like, “If current trends proceed, physical bank branches may very well be extinct within the U.S. by 2041.” (That quote comes courtesy of a report from fintech company Self.).
But bank branches aren’t dead, says Isio Nelson, managing director for research, fraud and thought leadership at BAI, a financial services nonprofit. They’re just evolving.
“While digital is getting used more with younger generations, branches are still very crucial — and never only for taking out money,” he tells me. “Branches will be a wonderful resource for education on navigating the banking system for somebody who may otherwise be unfamiliar and find it daunting.”
In other words, it’s less concerning the buildings themselves and more concerning the individuals who work inside them. There are a slew of tasks financial newbies can accomplish with the assistance of a banker, like organising their first checking account or applying for his or her first bank card. However the services offered go way beyond that, so even someone like me can profit from visiting a branch.
I should want to pick my banker’s brain on the merits of opening a certificate of deposit or a money market account, Nelson says. Or I can ask them find out how to budget or maintain a good credit rating.
Amid dubious TikTok life hacks and shady influencers, bankers are generally people I can trust to present solid advice, says Shawn Niehaus, head of consumer banking for Fifth Third Bank. Just by walking right into a branch, I do know that I’m getting expert, well-vetted guidance to assist me reach my financial goals.
Sure, I could seek that out online, but people prefer to confer with people, especially relating to the intimate topic of cash. Plus, it could possibly be easier to navigate complex financial situations like planning out retirement savings IRL, says Aron Levine, president of preferred banking for Bank of America.
“Clients want to come back into our financial centers for a conversation about their funds, especially when it concerns a bigger purchase, like a automobile or a house, or after they need to arrange a savings plan for his or her child’s college education, for instance,” he says.
As evidenced by my grandma anecdote, it is a generational trend, of course.
A 2023 survey from the American Bankers Association shows the depth of those differences. While 60% of millennials (born between 1981 and 1996) do most of their banking via mobile apps, the identical is true of only 31% of baby boomers (born between 1946 and 1964). One other 16% of boomers go for in-person banking most frequently, in comparison with just 4% of millennials.
“Historically, clients would visit financial centers for each day transactions — depositing checks, moving money, paying bills. Today, clients more often are selecting to finish these activities via digital channels,” Levine adds. “Our business has shifted from a transactional model to at least one based on relationship.”
Constructing relationships with folks of all ages is essential for banks today. The truth is, Niehaus says Fifth Third has been redesigning its branches to feel more casual. Gone are the times of awkward teller windows and stiff chairs where I actually have to sit down across a desk from a stuffy dude in a suit. Banks at the moment are more focused on providing couches, big-screen TVs and low bars where I can hang around alongside a banker.
It’s concerning the vibes, and about the concept that a long-term relationship with a selected banker at a selected place can profit me as I progress through life.
And while I actually have the privilege of preferring to bank on my phone, branch access will be crucial for people in underserved communities. Low-income persons are often forced to depend on alternative financial products that charge high fees and might trap them in debt. Even worse, these firms don’t provide the type of education that may also help people turn into financially literate.
“Developing these relationships with a banker in a branch can really be the stepping stone for somebody who’s underbanked,” Nelson says. Teaching people financial literacy may also help them improve their credit scores, he adds, which is essential to achieving financial stability.
The underside line
Physical bank branches can provide the chance for me to attach face-to-face with financial experts who can guide me as I hit various milestones. While it’s definitely possible to perform this online, Niehaus sums it up succinctly:”Having a private touch matters.”
Sure, bankers can sell me stuff, but they may offer me trustworthy financial advice. While they won’t find a way point me to a close-by drive-thru where I can get my snack fix the way in which my phone can, that is still a cool resource to have in my pocket.
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