5 reasons to think twice before closing branches
Cold economics shouldn't be the only basis bank and credit union leaders use to decide which branches to open and which to shutter. Financial metrics ignore an institution's role in a community, the reassurance a local office gives consumers, and the fact that many consumers still like branches in spite of easier digital channels.
While many financial institution branches may not be profitable on paper, bank and credit union leaders should think carefully before closing the doors. Even in the digital age, branches remain a critical channel for many consumers. Closing too many branches too quickly in some areas could lead to bad public relations, brand damage, angry consumers and business customers, and other nasty surprises.
The pace of bank branch closures continues to increase. Banks closed nearly 2,000 brick and mortar locations in 2018, and more than 11,000 since 2012, according to S&P Global Market Intelligence.
Many financial institutions are cutting locations to reduce costs as consumers shift towards digital channels. Meanwhile, consolidations and acquisitions are also persuading managers to close redundant locations in some markets.
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