As we enter 2024, once thriving US high streets are starting to resemble desolate ghost towns as America is taunted by the ever-looming threat of yet another financial crash.
If the economy is thriving then why are we seeing more bank closures than ever before and why are retailers being forced to shutter many of their branches?
Many banks and retailers are being forced to close locations in an effort to reduce expenses and stem the problems caused by an impending economic crisis. In the past two decades, the number of brick-and-mortar banks in the US has almost halved, a trend which shows little sign of slowing down. Data from the S&P Global Market Intelligence tells us that between 2022 and 2023 almost 5000 bank locations in America were closed permanently. In 2023 alone, two superpowers of the banking industry, PNC Financial Services Group and U.S. Bancorp, shuttered one in ten of their branches. This means that for the fourteenth year in a row, there has been a significant decrease in the amount of banks on our high streets.
In the past few years, the increase in branch closures has also been driven by a shift in the banking industry towards prioritising online services over traditional locations. While this transition is evident across the board, it is particularly affecting low-income neighbourhoods and rural areas. The depressing truth is that the high street banking network is disappearing before our eyes.
Many of these areas are experiencing what is commonly referred to as “banking deserts.” The consequence of this trend is a growing disparity in access to essential banking services, posing challenges for individuals in these communities who may face difficulties in accessing financial resources and support. Many financial institutions are embracing digital platforms and reducing their physical presence to survive. However, this comes at a high cost, not only for their customers but for their employees too. Less high street banks mean fewer jobs.
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