PROVIDENCE – Research undertaken by GlobalData, a London-based data and analytics company, shows that United States banks should limit branch closures despite the growth of online banking, as so-called “brick and mortar” branches remain the main channel of application in the U.S. for consumers to take out loans.
GlobalData’s 2018 Retail Banking Insight Survey highlighted the importance for banks to have a “wide-ranging availability” of branches, which it found are the main application channel for 55% of Americans requesting a loan, while 52% stated it was their preferred channel for speaking with an adviser.
GlobalData noted that JPMorgan Chase, which has the second-largest number of branches in the U.S., had followed the trend of other big U.S. banks, such as Wells Fargo and Bank of America, in closing 550 branches since 2013. But last year, JPMorgan Chase announced a turnaround with plans to open 400 new branches over the next five years, including opening branches in the Greater Boston and Rhode Island markets, where JPMorgan Chase hasn’t had a retail banking presence before.
The firm said the decision for branch expansion comes as no surprise, given that it has registered dwindling market shares in both credit cards (down 0.7%) and loans (down 1.2%) since 2010. The branch expansion goes in hand with the bank’s goal to not just open more branches, but to improve its relationships with clients, quoting Chase Consumer Banking CEO Thasunda Duckett as saying it is “so much more than building branches. … This is about new customer relationships, better access to credit, and local jobs.”
Referring to the survey’s findings, GlobalData retail banking analyst Oliver Wintle said: “It is clear why JPMorgan Chase has changed its position. Other banks should also consider following suit, as many also risk suffering the drawbacks of a condensed branch network and limiting adviser access to digital channels.”
Scott Blake is a PBN staff writer. Email him at Blake@PBN.com.