Banks have always been a place where people have felt safe depositing their savings, paying their bills, buying their homes, and funding their lives. Banks will continue on into the foreseeable future as they have all manner of purpose that stretches beyond day-to-day transactions. Still, one has to wonder, what the heck the point of banks even is anymore. I haven’t set foot inside of a bank in 5 years. I wrote about leaving branch banks in 2007 (1) and had already been out of the commercial banking game for some time then. Now? Branch banking is nothing more than a distant memory. With all the condensing and contracting and buyouts and mergers it is interesting to wonder how much longer banks will exist in the form they are now. Consider these reasons.
Direct deposit: I grew up in a generation which found direct deposit. When I first began working, years and years ago, I had to go into my standalone bank branch and wait on a long line, usually on Saturday morning (because checks were always issued on Friday after work) and spend the first hours of my Saturday letting my bank take my money and give me back some once my check cleared (which sometimes wasn’t for several days, but always at least Wednesday of the next week.) It’s a viscous cycle. So when direct deposit took hold it was like an awakening. “You mean I don’t need to go to the bank to get my funds?” Taking the physical necessity of having to go into the bank is making branch banking more and more obsolete. (That first bank I went to in my hometown lo, those many years ago, had changed names a few times and today sits vacant.)
Online Bill Pay: I don’t even think I’ve written a check in more than a year. The last check I wrote was probably to my landlord in Los Angeles…in June 2010. You don’t need to go into the branch to get your checks. You don’t even need to go into a branch to open an account! Everything is online; all their encrypted ways of finding out that you are who you say you are can be done with a few quick keystrokes. Online bill payments and online banking has made much of the reason for bank branches a non-starter. Granted there is a generation who won’t use online banking; my grandparents. But my mom and dad are as quick with their online banking as my younger brother is. So you’re talking about a whole generation of kids growing up today who will never have to set foot in a bank.
Restricted Hours/Changing Names: With all the consolidation going on in the investment world these days, it’s no wonder that banking isn’t really favored anymore. Norstar and Bank of New England became Fleet who then merged with Bank Boston who then became Bank of America; it’s all very upsetting. Who wants to think of all those name changes? Plus who has time to go to the bank during the hours which they are open? It’s a little ridiculous that a bank is open for three or four hours over a weekend (when most-everyone has time off). Online credit unions and bigger names in finance like Chase, Bank of America, Wells Fargo, and Citigroup will continue to lead people away from their branches as they gradually shut them down.
Branch banking was a novel concept our forefathers all used. Today we need ATM’s (which, coincidently, should be free for everyone), a place to have our money deposited, and a place from which to get mortgages and loans.
But branch banking looks like it’s soon to go the way of the fanny pack; a dated relic that was never really necessary with all the advancements we have today.