Steve Marr Blog

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Nov 20

Branch Banking Shrinks

Posted by: Steve Marr

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Branch banking has undergone significant change over the past several years. Step-by-step, financial institutions have reduced or eliminated interpersonal interaction as part of a long-term plan to reduce banking costs and staff.

For example, now you can deposit checks using a smart phone. When I receive a check, it’s easier to snap a picture using my banking application. Almost immediately the money shows up in my account. This saves me time and effort, but it also saves the bank handling time and provides for automatic check processing.  


For larger checks I typically use an ATM machine, another part of this move to automation. When I need cash, I simply use a convenient ATM machine and the money appears in my hand. I can even handle money transfers online which also eliminates interaction with a teller and automates the transaction. Standing in line to deposit a paycheck on a Friday or the first of the month is a distant memory.

Chicago Business recently ran a story documenting an 8% reduction in bank branches between 2010 and 2016. They project a 10% reduction over the next five years. Considering we have about 89,000 bank branches in the United States, this projection would leave 9,000 bank properties vacant.  Already real estate markets are weak for commercial properties. Many of these branches that are likely to close are in highly visible traffic sites. 

I tend to walk into a branch more frequently than many partly because I want the bank staff to know me in the event I encounter a problem or need to request a special service.  While the recognition may result in some consideration, I’m not sure how much it really helps. Even a few years ago I knew my branch manager. Now banks rotate management almost every day and building a relationship is very difficult.

The under 30 crowd almost never walks into a bank branch. They’ve adopted a similar philosophy that I have about the post office. I can buy stamps online as needed and I use my local UPS Store for sending and receiving packages, so I almost never need to step into the post office building or wait in its long line.

I’m personally not there yet for all automated banking but understand much of the younger crowd is. 

The reality is clear to me that tellers and those in branch management are going to see their world reduced. Anyone working in a bank branch should consider steps they can take to change their career path.

Long ago King Solomon wrote, “A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences.” (Proverbs 27:12, NLT) Wise people working in a bank branch will recognize the changing nature of their job and take precautions.


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