JP Morgan Chase to close 300 branches as customers go mobile
24 February 2015 | 15003 views | 9
With customer flocking to its mobile app, JPMorgan Chase is planning to close around 300 branches by the end of next year.
In a presentation from its investor day, the bank says that it will shut down around 150 of its 5,602 branches this year, and another 150 in 2016 as customers continue to shift to digital channels, particularly mobile, for basic transactions.
The JPMorgan Chase app now has 19 million users, representing a 20% year-on-year rise. In 2014 the bank's mobile cheque deposit feature was used 45 million time, 25% up on the previous year, while the P2P payments service was used 30 million times, an 80% rise.
With ATMs also being used more for things such as deposits, branch tellers are being used less often. In 2007 90% of JPMorgan consumer deposits were done via a teller and 10% via ATMs. In 2014 just 42% were via teller, 48% via ATM, and 10% via the bank's QuickDeposit mobile service.
This is proving to be a money saver for the bank, with costs per deposit 50% lower in 2014 than they were just seven years earlier. In addition, digital customers are 10% more likely to have JPMorgan as their primary bank and are 15% less likely to leave the bank.
However, the branch is still viewed as a powerful channel, with 90% of customers visiting one at least once a year. Like many banks, JPMorgan is restructuring the branches it does keep to be more focused on advisory services. From a 2011 peak of 60,000 branch employees, the bank had just 46,000 by 2014, but 60% of these were advisory staff, up 10 percentage points on four years earlier.
Earlier this week an FDIC report claimed that "there is little evidence that the emergence of new electronic channels for delivering banking services has substantially diminished the need for traditional branch offices where banking relationships are built".