At the end of 2024, S&P Global Market Intelligence released its latest Bank Branch Counts report, confirming what we’ve seen for more than a decade: bank branches are continuing to disappear. With nearly 25,000 net closures since 2009, banks—especially the largest ones—are aggressively reducing physical footprints. But what does this mean for credit unions? A lot.
Why Are Banks Closing Branches?
Several factors are driving this shift, including:
Mergers and Acquisitions (M&A): With M&A activity increasing, overlapping branches in consolidated markets are prime for closure.
Digital-First Banking: Robust digital banking capabilities mean fewer consumers need to visit branches for routine transactions.
Cost Optimization: Banks are reallocating branch-related expenses to digital investments, especially in areas with limited growth potential.
Strategic Market Focus: While banks are closing branches overall, they continue to invest in high-growth markets to strengthen their presence.
Branches as Advisory Hubs: Despite closures, banks recognize the value of branches as financial advisory centers and brand billboards.
What This Means for Credit Unions
Credit unions must pay close attention to these trends, as they create both challenges and opportunities:
A Digital Divide: Big banks are setting the pace with advanced digital capabilities. Credit unions that delay investments in tech will find it increasingly difficult to compete.
M&A-Driven Scale: As banks optimize their cost structures, they become more attractive for M&A, leading to fewer small banks and greater economies of scale that credit unions may struggle to match.
Opportunities in Rural Markets: As banks exit certain areas, credit unions can step in to fill the void—if they have the digital tools to support growth.
Enhanced Member Service: Branches aren’t disappearing, rather their role is shifting. Equipping Member Service Representatives (MSRs) with digital tools enables them to focus on personalized financial guidance rather than manual data entry.
The Strategic Imperative for Credit Unions
This isn’t just about technology—it’s about the future of financial services. Credit unions that embrace digital transformation aren’t just keeping up; they’re positioning themselves to thrive in a changing landscape. By offering seamless digital experiences while maintaining the trusted, relationship-driven service that members expect, CUs can carve out a competitive edge that stands the test of time.
Clutch is here to help. Our platform empowers credit unions to optimize digital and in-branch experiences, ensuring they remain relevant and competitive in an era of rapid change.
Want to learn more? Let’s talk about how we can future-proof your credit union’s member experience.
Contributor: Nicholas Hinrichsen, CEO & Co-Founder