The total number of branches for U.S. banks and savings institutions has fallen the past three years, returning almost to where it was before the financial crisis, according to the Federal Deposit Insurance Corp. In the 15 years from 1995 through 2009, the number of branches declined in only one year, 1995.
Among the nation's biggest retail banks, only JPMorgan has more branches than it did at the end of 2008. Bank of America, Citigroup and Wells Fargo have all shrunk their networks.
PNC Financial Services Group, SunTrust Banks and KeyCorp are among the large regional banks that have been shuttering branches as well.
Speaking to investors in March, PNC president Bill Demchak laid out the tightrope that banks must walk in marketing themselves through their branches and electronically.
"My mother goes into the branch and she is a great customer. She wants to go in the branch three times a week, and God bless her, we will let her do it," he said. "My son will never go in a branch, right? He's got every mobile app there is and he's horrified by going into a branch. We need both of those customers, and we need to figure out how we market to both of those customers without alienating either one."
In an interview with The Associated Press in December, Wells Fargo CEO John Stumpf acknowledged customers' changing habits but said that branches are too psychologically important to die.
"If they have a problem they can't solve, they'll go there," he said. "If Uncle Leo dies and leaves them 2 million bucks, they're going to take it there. They're not going to send it to the ethernet somewhere."
The new branches tend to have a few features in common, most meant to cut labor costs: "Instant issue" machines that manufacture debit cards right away so customers don't have to wait for them to come in the mail, free Wi-Fi, and ATMs that offer extra functions, including the ability to withdraw coins and $5 and $1 bills. Wells Fargo is adding an ATM feature that lets customers track their average monthly withdrawals and tells them how close they are to limits they set for themselves. At new JPMorgan branches, customers will eventually be able to log into ATMs with a tap of their phone, no debit card needed.
In South Korea, Standard Chartered is expanding "smart banking" branches that employ a staff of three, compared with an average of about eight in traditional branches. Banks in Europe are trying similar strategies under monikers like "self branch" and "express banking."
On Thursday, Bank of America announced that it will start to overhaul its ATMs with a "human touch." The most notable change in the new machines is that they'll be equipped with video screens connected to off-site tellers, which will let customers talk to tellers even at times when the branch is closed. The video screens will look blurry unless they're viewed straight on and headsets will be provided, which the bank said should help allay any concerns about privacy.
Bank of America has cut its branches to fewer than 5,500, from more than 6,100 four years ago.
Customers still come in to discuss loans or open savings accounts, says Katy Knox, who is in charge of retail banking and distribution at Bank of America. But they don't need the branch as much as they used to for simple transactions.
"We're evolving our banking centers around their preferences," she says.
But for all the talk about the "next generation" in bank technology, analysts question just how futuristic the new branches really are.
"I understand that there is a very real need to respond to cost concerns and to embrace technology," says Bancography's Reider. "But I don't think there's going to be a whole lot of customers who come in and say, 'Wow, an iPad.'"