Florida, the third most populous state in the US, is facing a sudden wave of bank branch closures that will affect millions of customers and businesses. According to the latest data from the Federal Deposit Insurance Corporation (FDIC), more than 200 bank branches in Florida have been shut down or announced plans to close in 2024, representing a 10% decrease from the previous year.
Why are banks closing branches in Florida?
The main reason behind the bank branch closures is the shift to digital banking, which has been accelerated by the COVID-19 pandemic. More and more customers are opting to use online or mobile platforms to conduct their banking transactions, reducing the need for physical branches. According to a survey by J.D. Power, 46% of US bank customers said they used digital channels exclusively in 2023, up from 36% in 2022.
Another factor that contributes to the bank branch closures is the consolidation of the banking industry, which has resulted in fewer but larger banks dominating the market. For example, in 2023, Truist Financial completed its merger with BB&T and SunTrust, creating the sixth-largest bank in the US. As part of the deal, Truist announced that it would close 800 branches across the country, including 150 in Florida.
How will the bank branch closures affect customers and businesses?
The bank branch closures will have a significant impact on customers and businesses, especially those who rely on cash transactions, face-to-face interactions, or specialized services. For example, some customers may face difficulties in depositing or withdrawing cash, applying for loans, opening accounts, or resolving issues. Some businesses may lose access to local banking relationships, credit lines, or cash management services.
The bank branch closures will also have a negative effect on the local economy and community. According to a study by the National Community Reinvestment Coalition, bank branch closures tend to reduce lending and economic activity in the affected areas, especially in low-income and minority neighborhoods. Moreover, bank branch closures can lead to the loss of jobs, tax revenue, and foot traffic for nearby businesses.
What can customers and businesses do to cope with the bank branch closures?
Customers and businesses can take some steps to adapt to the bank branch closures and minimize the disruption to their banking needs. Some of these steps are:
Switch to digital banking: Customers and businesses can use online or mobile platforms to access their accounts, transfer funds, pay bills, deposit checks, or apply for products. They can also use digital wallets, such as Apple Pay or Google Pay, to make payments without cash or cards.
Find alternative ways to access cash: Customers and businesses can use ATMs, cash-back options at retailers, or prepaid cards to obtain cash. They can also use peer-to-peer payment apps, such as Venmo or Zelle, to send or receive money electronically.
Shop around for other banks or credit unions: Customers and businesses can compare the products, services, fees, and locations of different banks or credit unions and choose the one that best suits their needs. They can also consider joining a community bank or a credit union, which tend to have more branches and lower fees than large banks.
Contact the bank for assistance: Customers and businesses can reach out to their bank for help with the transition, such as finding the nearest branch, transferring accounts, or accessing services. They can also provide feedback or voice their concerns to the bank or the regulators.
Conclusion
The bank branch closures in Florida are a result of the changing trends and dynamics of the banking industry, which favor digital and consolidated banking over physical and local banking. The bank branch closures will have a significant impact on customers and businesses, especially those who depend on cash transactions, face-to-face interactions, or specialized services. However, customers and businesses can take some steps to adapt to the bank branch closures and minimize the disruption to their banking needs.