Local bank branches close as consumers turn to technology

The number of bank branches in the Dayton metropolitan area has declined by nearly 18 percent in the last 10 years, a change experts say was largely driven by new technology and new customer preferences.

The number of bank branches in the Dayton region has declined by 44 from 246 to 202 since the year 2008, according to annual market share reports from the Federal Deposit Insurance Corporation.

Despite the decline in locations, area branches have actually seen deposits increase by more than $2 million in the last decade, FDIC reports show. It’s a reflection of how banking is changing and adjusting to customer demands, said JT Thurston, spokesman for the Ohio Bankers League.

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“Banks have always been all about the customer,” Thurston said. “That’s the business model because if they were not meeting the needs the customer of then the customer would seek services elsewhere…They have no choice to remain on the cutting edge.”

With 37 branches in the area, Fifth Third Bank provides services to nearly 30 percent of the Dayton region, according to the FDIC. The Cincinnati-based bank is always looking how to improve their services at branches and online, said Doug Smith, senior vice president and director of consumer digital banking at Fifth Third.

More than half of Fifth Third’s customers have started using mobile and online banking. Personalization has become key to banking and digital tools “create another channel” for people to do their banking, Smith said.

“The whole concept of one size fits all is gone,” he said.

Technology has been a big contributor to the decrease in the number of bank branches over the last decade, said Nick Osterfeld, PNC Bank senior vice president and regional manager of Dayton’s south region.

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With 23 branches in the Dayton area, PNC Bank has the third most locations in the region, the FDIC reports. But approximately 66 percent of PNC customers did not step into a bank last year, instead they used digital banking tools from the company, Osterfeld said.

“That is something that is driving our industry,” Osterfeld said. “Customers are demanding it…you have to provide that to your customers or you won’t have them.”

Though the number of branches could continue to decline based on geography, Thurston said they won’t disappear altogether, they’ll just adjust.

Some banks have even tried to become less like banks and more like destinations.

Richmond Bank, which has locations throughout central Ohio, is trying to attract customers with a more cafe-like atmosphere, Thurston said. The bank opened full-service coffee shops in three of its branches in 2015 where people can make donations for a cup of their favorite brew, according to Richmond Bank’s website.

“All of this is customer driven,” Thurston said. “If there is a market need for a brick and mortar presence the banks are going to provide it. If it continues to shift in another direction then that’s the direction the banks wil go.”


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