DENVER–Even as credit unions continue to build them, a former senator and long-time banker is predicting “bank branches are dead.”
The comments came in response to the opening of three new branches being tested by Bank of America that have no employees and offer only videoconferencing. Two of the so-called “mini-branches” have opened in Denver, another in Minneapolis. The facilities contain an ATM, in addition to the videconference screen to speak with a BofA employee.
The concept is not new; a number of credit unions also use a variation of the BofA mini-branch in which no live tellers are present, but other personnel are.
“This is the beginning of the end of the American bank branch,” Peter Fitzgerald, a former U.S. senator from Illinois, lifelong banker and founder of Chain Bridge Bank in McLean, Va., told the New York Times. “Bank branches are dead. They were killed by the iPhone. It’s like the horseshoe when the automobile came along.”
The Times report pointed to FDIC data showing that U.S. bank employment has been relatively steady over the past five years at about 2.043 million, but the number of U.S. bank branches has declined from a peak of 99,540 in 2009 to 91,861 in the third quarter of 2016, according to the American Bankers Association. Bank of America has 4,597 locations, down from 5,900 six years ago.
“Cash is dying out,” Fitzgerald told the Times. “Many Millennials don’t carry cash. They only use their debit card. In 2011 and 2012, bank branch traffic dropped precipitously. The last I checked, 98.5% of our bank’s transactions are done online and electronically.”