Taylor Scott
While banks are not shutting down entirely, hundreds of physical bank branches across the US have closed in 2025, with many more expected to follow suit. This trend is not new, but the pace of closures has accelerated in recent years, with the COVID-19 pandemic doubling the rate of bank branch closures in the US since 2020. The shift towards online banking is a significant factor in these closures, as customers increasingly turn to mobile apps and online platforms for their banking needs. However, the move to digital may disproportionately affect those with limited access to the internet, such as the elderly or low-income households. While the closures may impact wait times and the overall customer experience, experts assert that they do not indicate a lack of trust or safety in the banking system.
| Characteristics | Values |
|---|---|
| Reason for bank closures | Growing dominance of digital banking |
| Number of bank closures in 2025 | 40 U.S. Bank locations, 49 Wells Fargo branches, 52 Flagstar locations, and many more |
| Percentage of bank closures in the U.S. since the start of the pandemic | 5.6% decline in total bank branches |
| Number of Santander branches to be closed in the U.K. and U.S. | 95 and 18, respectively |
| Number of bank closures in the last 5 weeks (as of March 2025) | 145 |
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What You'll Learn
The shift to online banking
The rise of online banking is part of a broader shift towards digital banking services. Customers are increasingly turning to mobile apps and online platforms for their financial needs, from depositing cheques to managing investments. This shift has been driven by the convenience of digital banking, which offers 24/7 access to accounts and removes the limitations of traditional banking hours.
However, the move to online banking has also raised concerns. Some customers, particularly the elderly and low-income households, may face challenges accessing online services. There are also potential implications for competition within the banking sector, as the shift to online services may lead to increased concentration and higher costs for consumers.
To address these concerns, banks and fintech firms have invested significantly in security measures to protect customer information and guarantee safety. These measures include biometric authentication, end-to-end encryption, and multi-factor authentication. As technology continues to advance, the future of online banking is expected to bring uniform regulations that ensure both creativity and enhanced consumer protection.
While online banking offers convenience and accessibility, it is important to acknowledge that in-person banking services remain crucial for some individuals. For those with limited access to the internet or digital literacy skills, traditional bank branches provide a valuable alternative to digital banking.
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Bank closures in 2025
The rise of digital banking has accelerated the closure of bank branches across the United States in 2025. More than 320 U.S. bank branches were marked for closure in the first quarter of 2025, with major banks like Wells Fargo, U.S. Bank, Flagstar, and Bank of America leading the way. This trend is expected to continue throughout the year, as banks adapt to changing customer preferences and behaviours.
The shift towards digital banking was accelerated by the COVID-19 pandemic, which saw a significant reduction in branch visits. While some consumers still rely on physical branches for services like cash deposits, loan applications, and access to safety deposit boxes, the overall trend is towards decreased in-person banking interactions. This shift is supported by the expanding capabilities of mobile and online banking platforms, which can now facilitate a wide range of services, including check deposits, bill payments, transfers between accounts, and investment management.
The move to digital banking has raised concerns about accessibility and financial inclusion, particularly for older adults, individuals with limited internet access, and those in rural communities who may depend on face-to-face service. Longer distances to branches could result in reduced access to financial services, longer wait times, and a higher risk of financial exclusion for these populations.
Despite these concerns, banks are continuing to close branches and invest in their digital capabilities. This trend is expected to persist throughout 2025 and beyond, as banks work to meet the changing needs and preferences of their customers. While the shift to digital banking may pose challenges for some, it also reflects the evolving nature of the industry and the growing dominance of digital platforms.
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Safety of deposits
While bank closures are not a new phenomenon, their pace has accelerated in recent years. The COVID-19 pandemic has significantly exacerbated this trend, with the rate of bank branch closures in the US doubling since 2020. However, experts suggest that this shift towards digital and online banking does not imply a lack of safety concerning deposits.
The Federal Deposit Insurance Corporation (FDIC) provides deposit insurance to protect your money in the event of a bank failure. FDIC insurance covers traditional bank deposits such as checking and savings accounts, money market deposit accounts, and certificates of deposit. Your deposits are automatically insured up to $250,000 per depositor or $500,000 for joint accounts per bank. This coverage is provided by the FDIC to ensure that your money is safe and protected.
Similarly, the National Credit Union Administration (NCUA) provides the same coverage with the same limits for credit unions. This means that your money is protected by federal agencies, ensuring its safety and security.
It is important to note that FDIC insurance only covers deposit accounts and not all financial products offered by banks. For example, safe deposit boxes are not considered deposit accounts, and their contents are not insured by the FDIC. Therefore, if you are concerned about protecting valuables or large amounts of cash, you may want to consider additional insurance options or alternative storage methods.
In summary, while bank closures are ongoing and reflect a shift towards digital banking, the safety of deposits remains a priority. The FDIC and NCUA provide deposit insurance to protect your money, ensuring that your deposits are safe and secure, even in the event of a bank failure.
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Impact on customers
The shift towards digital banking has accelerated the closure of physical bank branches. While this move online is expected to continue, it will disproportionately affect those who have limited access to the internet and online banking, such as the elderly or low-income households. These customers may face longer wait times at the remaining physical branches and higher costs if the move to online banking reduces competition.
However, the shift to online banking does not mean that customers no longer need physical bank branches. Many people still go into banks for a variety of reasons, such as cashing a check or obtaining a loan. Therefore, banks must balance their digital transformation with maintaining some physical locations.
The closure of bank branches is also a response to the decline in foot traffic since the COVID-19 pandemic. Banks are working to save money by closing branches and focusing on their online and mobile banking platforms, which can now support most customer needs.
While the closure of bank branches may not impact the security of bank accounts, it could affect customer trust. However, experts believe that there is no reason to believe that traditional banking is less trustworthy than it has been and that better regulation has made the American banking system more resilient.
Overall, the impact of bank closures on customers is mixed. While some may benefit from the convenience of digital banking, others may face challenges due to limited access to online services or longer wait times at physical branches.
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The future of physical bank branches
While this transition to digital banking may offer convenience and accessibility for some, it also raises concerns for those who face barriers to accessing online services, particularly the elderly and low-income households. These groups may struggle to adapt to the changing landscape and could be disproportionately affected by the closure of physical bank branches. Additionally, experts warn that the shift towards online banking could lead to longer wait times and a decline in the overall customer experience for those who continue to rely on physical branches.
Despite the growing dominance of digital banking, it is important to note that not all customers are ready to say goodbye to in-person services. Many individuals still prefer or require face-to-face interactions for tasks such as cashing checks or obtaining loans. As a result, banks must carefully consider their physical presence, ensuring they maintain a balance between their digital offerings and in-person operations. This may involve introducing new formats and investing in digital capabilities while retaining a select number of physical branches to accommodate the diverse needs of their customers.
The closure of physical bank branches does not indicate a lack of trust or safety in the banking system. Experts assure that the reduction of physical locations does not impact the security of bank accounts and that money remains protected by organizations like the Federal Deposit Insurance Corporation (FDIC). Therefore, while the number of physical bank branches may continue to decrease, customers can trust that their funds are secure and that the banking system is regulated to ensure resilience.
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Frequently asked questions
Yes, banks are currently shutting down across the US. In March 2025, 32 banks closed nationwide, and 145 branches closed in the last five weeks.
The rise of online banking has meant that fewer people are using physical bank branches. Banks are also closing branches to save money.
Yes, experts say that the reduction of physical bank locations does not change the security of bank accounts. The FDIC provides deposit insurance to protect individuals' money in the event of a bank failure.
Many large banks have announced branch closures, including Wells Fargo, U.S. Bank, PNC Bank, Bank of America, JPMorgan Chase, TD Bank, and Santander.
