NEW YORK - JPMorgan Chase (JPM) plans to close 300 bank branches over the next two years, about 5 percent of the total, as more customers move online and the bank seeks to cut costs.
The closures are part of a $1.4 billion cost-cutting plan the bank announced for this year. The latest developments were revealed during the bank's annual investor day conference Tuesday.
Online and mobile banking have become increasingly popular and that trend is expected to continue. The shift online has begun to make brick-and-mortar branches less necessary and, frankly, expensive.
Tellers handled only 42 percent of all bank deposits last year, according to JPMorgan, down from 90 percent in 2007. Banks have made even visits to an ATM less necessary, introducing technology that only requires customers to take a picture of a check with a smartphone to make a deposit.
Teller transactions are now among the most expensive for banks to process. It costs JPMorgan roughly 65 cents each time a deposit is made through a teller, more than eight times the cost to process an ATM deposit. Deposits through a smartphone costs the bank three cents, more than 20 times the cost of a traditional deposit.
Still, roughly 90 percent of JPMorgan customers visit a brick-and-mortar location each year, with an average visit of 12 times annually. The bank had been opening net new branches as recently as 2013, but closed 28 net branches last year.
Due to the increasing use of online and mobile banking, bank branches will move away from everyday transactions to focus more on advisory services like wealth management and account openings, JPMorgan executives said. Customers should, in time, expect to see few teller windows open and more ATMs.
A spokesman said it was too early to know which bank branches will close. JPMorgan had 5,602 branches in 2014 and employed roughly 46,000 people at those locations, not including branch managers.