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At Citigroup (C), we just learned that 15% have been eliminated in the past year. That leaves only 779 in North America.
At Bank of America (BAC), 234 have gone the way of the dodo in the past several months.
At JPMorgan Chase (JPM), 300 are being shuttered as we speak.
I’m talking about one of the 21st century’s biggest endangered species: the bank branch. And chances are, you’re helping eliminate them almost every single day.
How? Well, let me ask you a question: When was the last time you deposited a check with an actual bank teller? Or even at an ATM? I can’t remember personally, and for a very simple reason. I bank with Chase, and the company’s smartphone app lets me do it right from my iPhone 6!
While I haven’t taken advantage of the service yet, Chase also allows me to send money via email to someone using my phone. And of course, I can settle up my electricity and DirecTV bills just by tapping a few keys on my phone … transfer funds between my accounts … pay off my credit card and more.
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| Will bank branches soon be a thing of the past? |
Indeed, the pruning of traditional branch networks is one of the biggest stories in banking this earnings season. More banks are talking about how they’re willing to forego physical real estate and traditional bank tellers. That’s partly because it’s cheaper for them to eliminate branches (boosting profits), and partly because they know customers are getting more and more comfortable with banking on their smartphones, rather than in branches, at ATMs or on their PCs.
Chase just said it now has 21 million “active” mobile banking users, up 50% in the last two years. At Wells Fargo & Co. (WFC), the number is around 16 million, while at Bank of America, it’s almost 18 million. Those are big numbers, and they’re only getting bigger over time.
Is there a way to profit from this trend toward mobile and person-to-person payments? Well, the gradual elimination of bank branches helps boost profit for the mega-banks. So, you could buy one or more of them. But they face other problems, from ongoing litigation costs to lackluster revenue growth.
| “Is there a way to profit from this trend toward mobile and person-to-person payments?” |
Ebay (EBAY) is about to spin off its PayPal Holdings unit, with trading as an independent company slated to begin July 20. That could be another avenue worth exploring, especially considering that the electronic payments company just reported a 28% rise in payments processed and an 11% gain in active accounts.
But one of my favorite companies is a highly rated bank technology provider I added to the Safe Money model portfolio a few months ago. It’s shooting the lights out, setting new highs week-in and week-out – and I have every expectation those gains will continue.
In the meantime, let me know what you think about the endangered bank branch. Is this a positive or negative trend for bank customers and bank investors? Do you use mobile banking, and if so, what are your thoughts about its convenience and reliability? What investments, if any, do you have that are helping you make money from this trend? Use the website to share your thoughts.
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Is a Bloody Wednesday crisis looming thanks to a Federal Reserve rate hike, perhaps as early as September? Is President Obama on the right track with his Iran plan? Those are just a couple of the topics you weighed in on over at the website.
Reader Bob said he doubts Fed Chairman Janet Yellen will follow up her comments with action. His view: “I’m sorry, but Ms. Yellen is a talker – a big talker! She just talks and talks and talks and does nothing. The Fed is way behind the curve and is not in touch with the reality that prices are rising on all fronts. Yet, Ms. Yellen and her fellow doves do nothing.
“I’ll believe it (any rate increase) when I see it. It was going to be last month, now September, and now her colleagues are talking 2016. What is the Fed going to do when this economy explodes, then goes into recession? It can’t cut rates. It has an almost $5 trillion balance sheet. I suppose that it will be forced to do what it is doing now – nothing!”
Reader Ray D. also expressed skepticism about an impending rate hike, albeit for a different reason: “I don’t expect the Fed to raise interest rates this year because it would strengthen the dollar even more, causing more losses to the companies doing business overseas. Not a good idea.”
But Reader Mark said the stock market is already in the process of peaking as part of the turbulent process I’ve outlined. His comments:
“As far as ‘Bloody Wednesday,’ the decline in the stock market has started. S&P peaked in June 2007 at 1408, about 14,000 Dow. By January 2008, the monthly sell signal was generated (MACD-related and other indicators) – obviously, the daily and weekly signals turned over earlier. As late as May 2008, the S&P was back at 1280, before it dropped to 520 just under a year later.
“The NEW monthly sell signal in the S&P triggered in February 2015. After that, we’ve made a new divergent top, common when you have a 400% rise over the course of six years. Make no mistake: Both weekly and monthly indicators are firmly in sell mode, with lots of room to go to the downside. The sell signal is providing loads of time to exit long positions and go short (or hedge) before a large decline occurs.”
Meanwhile, with regards to the Middle East, Reader Fred 151 was very negative on the deal with Iran. He said: “This treaty gives Iran access to billions and billions of dollars to fund their evil activities. This is money that they desperately need. The alternative was to keep the sanctions in place and to not facilitate their mad plans.
“They have publicly stated over and over and over that they intend to destroy us. We should not in any way work with them to further their goals. This is insanity.”
But Reader Paul F. said achieving peace is the most important goal in this day and age, even if it comes from a sub-standard deal. His view: “War is no longer an answer in today’s world. It has become too small. Many think of wars in monetary terms, but what amount of money can be put on a life? This comes from a Vietnam vet.”
Thanks for sharing all those comments. If I didn’t get to yours, or if you didn’t take some time to weigh in yet, make sure you visit the website soon. Your fellow investors and I want to know what you have to say.
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Lots of people are sitting on their couches downloading movies and TV shows, I guess. That’s the only conclusion you can reach after looking at the latest results from Netflix (NFLX).
Shares of the online video streaming service surged after new subscriber additions doubled to 3.3 million in the second quarter. That brought the total number to 65 million, topping analyst forecasts.
Lawyers, lawyers everywhere – that’s what U.S. financial firms are still dealing with, years after the depths of the credit crisis. Goldman Sachs Group (GS) was just the latest example, revealing it had to set aside $1.45 billion for litigation and regulation tied to mortgage practices in the second quarter. That caused profit to drop to $1.05 billion, or $1.98 a share, from $2.04 billion, or $4.10 a share, a year earlier.
Initial jobless claims dropped by 15,000 to 281,000 in the most recent period, besting estimates. We haven’t had claims below 300,000 for this long (19 straight weeks) in 15 years.
Which candidates are raking in the campaign donations early on? According to The New York Times, Hillary Clinton is at the top of the heap with $47.5 million through June 30. On the Republican side, Ted Cruz is winning with $14.3 million.
But that doesn’t include the PAC money that will also be used to back candidates. Jeb Bush has raked in $103 million from those outside groups, while Ted Cruz is in second with $38 million.
Are you writing checks to a particular candidate, and if so, why? Do you have any thoughts on the great earnings out of Netflix, or the ongoing litigation problems in the financial sector? Hit up the website and share them when you can.
Until next time,
Mike Larson
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
{ 47 comments }
I came here to leave a comment and then I was confussed to see that the first thing i came accross was to sign up for your newletter “Money Markets” which I am already receiving so I would appreciate it if you could remove one of my email requests so that I am not receiving two of everything. Or let me know how I can stop receiving two now that I created an additional mailing.
As for the bank branches, I live on the North Shore of Oahu, Hawaii, and our household having several bank accounts uses the bank branches here several times a week. I would find it a great inconvenience to have the branches go away here.
Although, some of our sales are on the phone and on the internet, we do use the bank branches regularily.
We have to hold Mike Larson to account, for his immature/over-hyped statements..Last month with oil at $60 barrel, he claimed “oil is in a bull market”..Bull*#^*..it was a dead-cat bounce in a bear-market with price now back around $50
Contribute to a politician? You’ve GOT to be kidding, Mike. Even the best of the species are little removed from lowlifes and scum, living off the public teat while “serving” us by ever increasing taxes and fees, and hemming us in with ever more restrictive laws and regulations. All for “our own good”, of course. Down with all of them.
Look at what the pollies have done to the people of Greece. Completely ignored them and done the opposite of what their mandate was and referendum requested.
It’s about time for another ” shot heard around the world”. Crazy King George had nothing on these guys. Jim
It continues to puzzle me how The Left visualizes a free society as everyone being in a political and financial straight jacket. Surely America will soon tire of this nonsense.
I hope they keep accessible branches in all areas. Largely the older generation (my wife and I are over 70) rely on them, plus they are needed for loan closings that require physical presence. I am not comfortable using my iphone for all the transactions like check cashing, and my wife has no smart phone and does not use the computer, she relies on one of the bank employees with whom she has a friendly relationship to give her the account balances and make transfers, etc. Without our friendly local branch we would be lost for banking and I am sure there are many others like us!
Sooner or later, they will eliminate all bank branches so that we are forced to do everything on-line. Then, whenever they choose, they can freeze our accounts and we are at their mercy. Come on people, wake up before it’s too late. Without physical money that gives us freedom and anonymity, they can track our every move. And to think that some people still believe that the Mark of the Beast is a fairy tale. Every passing day it becomes more and more possible — and probable.
When they have complete access to our finances we will be totally under their control. If you can’t buy food or meds you will be at the mercy of the authorities. Scary indeed. Jim
Gold and silver bullion
Feberal Reserve notes under your matress. Or diversify using crypto currencies.
We don’t bank at the major banks and everyone we know doesn’t either. We use local credit unions and there more and more credit unions popping up all ove.
I personally don’t know anyone that banks from their phone. I was glad to read your article as i didn’t realize how many people “do” bank from their phone. Any information you can learn is interesting and important. Thanks!
People still need branch personnel to handle transactions smartphones, computers and ATMs cannot handle. If the banks were smart, they would be cross markeing people who come into the branch. Problem is they have centralized so many functions and put people in the branches who have no authority; they must call the same call center and interminably wait, as customers do, for a live body who also has no authority to handle problem resolution. Corporate managers responsible for faulty policies and procedures have placed themselves off limits from direct contact with customers when problems surface that no one can solve. The branch personnel have insufficient training and seek better positions as soon as possible. Branch staffing has been significantly cut back in terms of raw numbers, also adding to poor customer service. And yes, the Federal Government and big banks want us to go cashless so they have maximum control of our individual activities and generate large transaction fees for processing debit and credit transactions. Debit cards and Roth IRAs are two of the most insidious and anti-consumer forms of financial services one could possibly imagine. Cash and precious metals are our only true stores of value, and the cash could be eradicated with the stroke of an Executive Order.
If the proliferation of branch banks closing pleases the stockholders of said banks, have they considered what happens to the users of safety deposit boxes ? Concrete bunkers in the back yard ?
The age of the bank branch is certainly numbered. The closures of branches and centralization that we see today is just the beginning and merely the tip of the iceberg! The real renaissance in this (and other) industries will soon hit the global markets like a tidal wave! Why? Advanced computer technologies, consumer based algorithms, block-chain technologies (such as Citi-Coin, Bitcoin) are about to grow exponentially to enhance and promote a unified one-world market place all based on a standardization model consistent with the latest technological inventions of our day! Expect to see many new disruptive technologies in the near future that will put momentum behind this trend! What we see now is just the dawn of a new generation! “Adapt or die”!
Physical banks are quite useful for atypical tasks such as cashier’s checks, money orders, traveler’s checks, safe-deposit box, loans and mortgages, signature guarantees, last-minute check cashing and bill paying…Granted, these are not everyday jobs but they often require more confidential F2F attention. Unfortunately, with fewer physical branches there will be some lines and waiting.
I have yet to purchase a smart phone because in my area, the only common virtual economic transaction is at local ATMs. No grocery stores offer debit card payments, and online bill payments are practically unheard of. With time that will change…
One more step closer to the the destruction of personal contact. Politicians and other nefarious groups love it when we do not converse with each other but, instead, gobble up their pablum
There are are also internet only banks, which offer checking and savings, often with a higher interest rate, and 24/7 customer care service-speaking to a live human via chat or phone. However preferring to deal with my problems in person, I want to go to my corner bank, evn if it is a small little bank ora credit union.
Thinking about subscription
My money
IN THIS CASE WITH THE BANKS I PREFER THE OLD FASHION….WHY?? BECAUSE YOU HAVE MORE CONTROL OVER YOUR MONEY…MAINLY WHEN I NEED MONEY …DO IT IN PERSON … DO NOT BE LAZY GO TO THE BANK .. I FEEL MORE SECURE AND IS THE RIGHT THING TO DO….IS ABSOLUTELY INSANE TO GET RID OF THE PEOPLE WHO WORK IN THE BANKS…WHERE ARE THEY GOING TO WORK??? … NOT ONLY THAT MORE ABANDONED BUILDINGS….LOOKS LIKE WE REALLY FOLLOWING THE LATIN WAY…AND THAT IS A BAD NEWS……….
Just how will we have access to CASH. I have social security that comes direct to my bank and I draw it out leave small balance. Use money orders for bills and
keep rest of cash for other needs. How can I continue to handle my finances
without problems occurring?
I think we can expect to have a cashless society in the not to distant future. Cash is a nuisance to the authorities and hard to track. Louisiana now has a law against using cash to buy used merchandise. Barter anyone? Jim
BILL GATES ON BANKING ( 1995)
” Banking is necessary, banks are not ”
Clearly, Bill Gates saw many changes only now being more widely recognized. Change in finance and banking can only accelerate from here. Say hello to various non-bank financial services from Apple Pay to Goggle “Wallet”. Bitcoin, and many new “crypto-currency” alternatives on the way in future years. Digital currency is going to eventually replace physical cash, I am afraid.
In fact, ECB (European Banks) already want a “cashless” Europe so nobody can “run” on a bank or deplete ATM’s, as in Greece today. Govt. + Banks will soon have total global control and can monitor every single transaction in all currencies. No more paper money in stuffed in the mattress, even with truly negative interest rates applied to regular bank accounts. I am not so sure eliminating alternatives works for everyone in the long term.
Mike – how about an update on your ‘energy’ forecast. We’re gettin killed here after your bullish forecast last two months! Hang in there or sell?
Great article Mike.
I agree completely.
Bill Gates said “In the future, financial transactions will be digital, universal and almost free.”
Cryptocurrency is one trend that will make that possible, but BitCoin (the most popular one) has serious flaws and did not make it as the universal medium.
A new Cryptocurrency called OneCoin is growing 3x as fast as bitcoin and is poised to succeed where Bitcoin did not.
Happy to communicate privately on that with you, Mike.
Cap 1 closed a nearby branch last December. It had been open less than a year.
And it was a new building. Still vacant.
Banking at Chase is your first mistake. They crashed our economy and are even bigger now. March your money down to your local bank and support the local economy.
More and more, the local banks are either being bought out by bigger banks, or merging with other local banks to have more financial strength. Sad to see, but that’s how the cookie crumbles.
Absolutely!
Not only are you giving the big guys all the ‘power’ you’re limiting your choices. A cashless society is a government controlled population.
Every week or so we hear of some government agency or huge corporation being hacked. Aren’t we just asking for trouble in letting go of the last vestige of personalized contact with our money and its safety when we see the neighborhood branch bank shut down in favor of cyberspace as its custodian? This is the meandering of an octogenarian who still believes in God, Government, and the B of A.
I’m another octogenarian, but I haven’t been to a bank branch in 2 or 3 year,s except to order new checks when I ran out. I still send checks for odd payments, but bank on-line for all the regulars. ATM for cash or deposits. No problems so far. Branch banks are going to devolve into nothing but a manager and one or two people to handle loans and such, plus a safe deposit vault. Small business people will come in mornings to pick up cash for the day, or deposit cash proceeds, and that will be about all they do. Maybe a drive in window. Some branches will close, or be bought out, forcing many businesses and individuals to change banks – an inconvenience. Example: Susquehanna Bank, a small regional with sizeable business in my area, was just bought up by BB&T.
Having been born in the 50’s, I guess that I’m old and technologically challenged. I and my employer both utilize the local branch of a small, regional bank that excels at personal service. With security breaches at Target, the White House and OPM, how long will it be before someone uses your smartphone to clean out your bank account? Also, like many other industries, big banks will be overtaken by robots and machines adding to the already tenuous unemployment problem.
Sorry, but no electronic banking, especially by phone for me…The security is just not
that good, in face of the determined hacking efforts we have witnessed at Target, Home Depot,etc.. The ATM is fine, and I do go inside the branch 1-2 times average per year, for various reasons. A reduced number of branches yes, but not complete extinction. There are just too many credit union offices out there ready to provide personalized, human service.
I see where Josef Mengele’s grand daughter has found a home at Planned Parenthood. Watch out all you “. Seventeen Weekers”.
I use a bank branch and I do not want to change. I deposit checks and get cash every week. I do not use an ATM for security reasons – theft of ID and Bank numbers, and robbery. I prefer to deal with tellers, particularly the ones I become acquainted with, for personal service.
Re: Netflix
Why the surprise? As the father of 5 children, ages 25-17, I can tell you this generation is informed, aware and on top of everything. BUT, they don’t read newspapers, watch much news on television or go to the movies likenwe used to.
Today Facebook is the largest publisher without creating any of it own content; Airbnb is the biggest hotelier without owning any hotel rooms; Uber is the world’s largest transportation without owning any vehicles. Are we surprised Netflix is growing by leaps and bounds? The times they are a changin’!
Ditto for my kids. I’m not sure any of them even know how to read, because I’ve never seen them do it. I guess I’m one of the first Baby Boomers that is being forced to admit I’m an old fogey now. Cause I am! Jim
I still go to the bank on a monthly basis, to pay my bills etc. I personally do not trust the
Net. Yes I work 10-12 a day but I still find time to go to the bank, I guess I’m old school, but you will find time if you have too.
Modern people sell their soul for “convenience.” Don’t do it. I like to go to my banks.
I know the people and they get to know me. That’s many times better and safer than their so-called “secure” sites. Don’t let them scare you into giving up using cash.
DEAR! IM HAVE MORE TIME FOR YOU COMPANY BANK.IM WANT FIND GOOD CONDITION FOR EACH OTHER.HOPE ON SUPPORT! THANKS! SERGE
HIGHLY RATED BANK TECHNOLOGY PROVIDER NOTED BY MIKE LARSEN in his daily rant? I am a Safe Money Report reader and I have not read such thing. what issue and can you have it forwarded to me? Thank you.
SS ETTINGER
Who in the USA is going to be the leader in production of graphene? China is the major source of graphite, the primary component of this new miracle material. I want in on the ground floor while the product finds its place in the market and manufacture of marvelous new products. Does anyone have an answer?
Never shall I do banking business on a cell phone or any other phone. Difficult enough to protect my privacy, now I’m going to put personal ID information on the internet? And have to pay a $%^&* lawyer some $10K to clear my accounts once their numbers are stolen? Hah!
Jobless claims! Oh, those are the folks collecting unemployment. What about the ones who no longer qualify, and the ones who have just given up looking for work? Come on, stop with the phony numbers…please! These are the real jobless!
Keep the branch banks, for goodness sake. I know a lot of oldsters who can’t even make a call on a new telephone, much less handle a bank account where they would need to depend on someone else, maybe even someone they don’t know or trust, to help them. it is hard for an old dog to learn new tricks.
I like the bank branches. To me, they are a more pleasant experience than a machine.