These are merely bank closures and not bank failures, although two smaller US banks did fail this year. People simply prefer online banking as we have made the switch from relational to transactional banking.

Bankrate conducted a survey that found 77% of Americans prefer online digital banking, yet other surveys believe the figure is closer to 89%. Digital banking has been rising in popularity in recent years, up from 203 million domestic users in 2022 to the 216.8 million projected users in 2025. The survey found that 34% of consumers use online banking on a daily basis, consistently checking their account and transactions. There has even been a 19% increase in use among the 65+ crowd who is least likely to use digital services.

The total number of bank branches across the US fell below 65,000 in Q2. Texas, New York, and California saw the largest decrease in brick-and-mortar locations. Many branches that chose to remain open are only offering drive thru services. One in three banks has closed in rural areas as there is no demand, and the Federal Reserve noted in its annual Banking Access Report that the number of "banking deserts" across the Midwest is rising.

Banks have no overhead with digital banking services and they do not need to hire staff. The cost-per-transaction for in-person banking is $4.00 compared to only $0.04 for digital. AI is rapidly replacing bank tellers with a 3 to 1 ratio.

The trend is global. The United Kingdom anticipates 370 to 450 branch closures this year. Germany and France are facing 1,100 closures combined. The Asia-Pacific region of the world saw a 16% reduction in bank branches from January to May 2025. Certain nations like Malaysia and Thailand also offer branchless micro-banking kiosks to substitute relational banking.

The money in your bank account is already just an electronic book entry. Not only is there less demand for face-to-face banking, but they are also preparing for CBDCs as bank branches are unnecessary without physical paper money. You can deposit a check on your phone or at a kiosk, but e-checks are rising in popularity. The only thing left for a branch is safe deposit boxes, and the government assumes you are hiding cash there anyway. Relationship banking is becoming a thing of the past, the latest casualty in the cycle of creative destruction.