Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Bank branches slowly fading away in neighborhoods

Pedestrians walk past a Citigroup Inc. Citibank branch in New York.
Victor J. Blue | Bloomberg | Getty Images

Bank branch closures are heading for a record year as the industry trims down and services get increasingly electronic.

Institutions have shut 2,599 branches in 2014 against 1,137 openings, a net loss of 1,462 that is just off 2013's record full-year total of 1,487, according to SNL Financial. The move brings total U.S. branches down to 94,752, a decline of 1.5 percent.

The trend, which has branches at their lowest aggregate level in at least eight years, has come about due to a plethora of reasons: A surge in mergers and acquisitions, primarily concentrated in regional banks but recently spreading to larger ones; the move to e-banking where customers can do most of their tasks either online or at automated tellers; and the economics of a low-interest-rate narrow-yield-curve environment that makes it less profitable to be spread out.