In the age of apps and online banking, banks are opening dozens of new branches in Massachusetts — here's why
An average of 1,646 branches have closed each year in the U.S. since 2018, according to an analysis of Federal Deposit Insurance Corp. data by Self Financial. California had the most closures, followed by Florida and Illinois. If branch closures were to continue at this rate, the report says there'd be no branches left in the U.S. by 2041.
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The pace picked up in Q1 2025 with a total of 148 branch closures, according to S&P Global Market Intelligence data. That was led by U.S. Bancorp (reporting 50 branch closures) and Wells Fargo & Co. (reporting 23 branch closures).
But, despite this overall decline, some banks are actually building new branches or renovating older ones. Indeed, the American Bankers Association says a 'counter trend' has emerged, 'gaining momentum over the past two years to where now many of the nation's largest banks have announced specific plans for widespread branch expansion.'
And there's one state where we're seeing dozens of new branch openings. Here's why.
Chase plans to open 50 new branches in Massachusetts by 2027, including small towns such as Sudbury (with less than 20,000 people) and Weston (with less than 12,000 people). This is part of a larger expansion the commercial bank announced last year, which involves opening more than 500 new branches and renovating 1,700 locations across the country.
'You don't see it in lower-income neighborhoods,' Eric Rosengren, former president of the Federal Reserve Bank of Boston, told CBS News. 'You see it in wealthy neighborhoods, because even a few wealthy individuals can provide a significant amount of income coming from the wealth management.'
That's because many affluent customers still value face-to-face financial advice.
Indeed, JPMorganChase is expanding its 'affluent' offering with 14 new J.P. Morgan Financial Centers across four states, for a total of 16 locations — with plans to double that by the end of next year.
These centers, based in Massachusetts, California, Florida and New York, are designed to provide a 'uniquely tailored and high-touch experience' to high-net-worth clients.
JPMorganChase isn't the only one expanding its offerings.
'Large regional and national banks, such as Chase, Bank of America, Fifth Third, PNC and Huntington, have all announced significant branch expansion efforts in recent years,' according to an industry insight by the American Bankers Association.
Bank of America, for example, has plans to open more than 150 new branches across 60 markets by the end of 2027, including 40 this year.
While 90% of Bank of America's client interactions take place through digital channels, its branches 'have adapted to focus on meeting spaces where clients can have in-depth conversations about their finances,' according to a release. Last year, about 10 million clients made appointments with its specialists in physical locations.
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Opening new branches could be a way for some banks to expand their wealth management offerings in new markets without having to acquire other banks.
While Chase is targeting affluent markets, its expansion will also include entry into 'low-to-moderate income and rural communities with little access to traditional banking services,' according to a release.
While Self Financial's report predicted that bank branches could become extinct by 2041, its analysis also found that 39% of respondents had the most trust in banks with physical branches.
In some cases, physical branches are still very much a necessity.
But banking deserts (neighborhoods with no nearby branches) are on the rise, according to the U.S. Bank Branch Closures and Banking Deserts **report.
'Despite the overall trend toward online banking, older, disabled and lower-income communities often rely on in-person banking. For people facing other barriers to banking services, having no bank branches nearby could limit opportunities to foster financial health and build wealth,' according to the report.
It also points out that having a personal relationship with your local banker is important for loan and grant applications, fraud prevention and financial guidance. As well, many small businesses still rely on those personal relationships for financing applications.
And, despite a common belief that younger generations do all their banking online, a few studies have found that Gen Z still likes to have branch access — even more so than millennials.
One study by eMarketer found that, while banking habits vary widely among generations, 'younger consumers were more likely to visit bank branches weekly or more.' Another study by LevLane found that less than 5% of Gen Z fully trust AI-driven banking features, compared to 21% of millennials.
While we're seeing an uptick in branch openings, there are still fewer branches than there used to be. In Massachusetts, for example, there are still fewer branches than there were a decade ago (81,405 branches in 2014 vs 68,632 in 2024), reports CBS News.
Regardless, it looks like we may not see the death of the bank branch any time soon.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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