Bank of America will open over 165 new U.S. branches by the end of next year, with the new model will de-emphasizing teller transactions.
While the increase in brick-and-mortar locations may seem at odds with the continued shift to digital banking, Bank of America’s leadership told Reuters that physical branches account for 80% of its new checking account openings.
This news comes after rival JPMorgan Chase announced its ambitious strategy to expand its footprint by 500 branches over the next three years. JPMorgan currently has the largest network of bank branches in the U.S., with more than 1,000 more branches than Bank of America.
Company Storefront
As more customers complete routine transactions online and at ATMs, banks have redesigned their branches to spotlight offerings like mortgages, investments, and other loan products. At JPMorgan Chase’s new branches, a consultative area for customers will be the primary focal point.
“Our branch network is one of the key reasons that customers open accounts with us and it has helped us attract deposits,” Jennifer Roberts, CEO of Consumer Banking at Chase, told Reuters. “We really view our branches as a storefront for the entire company and it is an anchor for us to expand our relationship with customers as we aim to be their primary financial partner.”
Critical Inroads
Bank of America’s move comes as many consumers, especially younger generations, have shifted away from larger banks. While Gen Z wants a sleek, digital-first experience for most of their banking needs, they also look for guidance when making significant financial decisions.
Gen Z is reaching the age where most adults choose their primary financial institution, making it critical for banks to establish relationships now. This is likely one reason why Bank of America is accelerating its branch expansion, adding roughly 40 new locations this year.
However, Bank of America still has around 1,000 less branches than it did 10 years ago, and most of that period was spent redesigning existing branches. It was not until the past two years that the bank renewed its expansion efforts.