Jamie Spencer
Bank of America has revealed ambitious plans to open more than 165 new branches across the U.S. by the end of 2026, signaling its intent to intensify competition with industry rival JPMorgan Chase. This strategic shift reflects a broader change in how major banks are operating, as they increasingly prioritize in-person sales of financial products like mortgages and investments over traditional teller services.
Focus Shifts from Transactions to Financial Products
As digital banking continues to reduce the need for routine physical transactions, Bank of America’s new branch strategy aims to enhance its in-person services. According to Aron Levine, the bank’s co-head of consumer banking and president of preferred banking, around 80% of new checking accounts are still opened in person at financial centers, with the remaining 20% being opened online. This focus on physical branches reflects the ongoing demand for face-to-face interactions when it comes to more complex financial decisions, such as loans and investment products.
Branch Footprint Evolves Amid Digital Banking Growth
Despite its recent expansion plans, Bank of America’s overall branch footprint has actually decreased over the past decade. The bank currently operates about 3,800 branches, down from more than 4,800 in 2014. However, over the past two years, the bank has added over 100 new branches, emphasizing a shift toward providing a wider range of services at its financial centers, including banking, lending, and brokerage services.
This branch expansion is part of a broader $5 billion investment that Bank of America has made over the past decade to upgrade and modernize its financial centers, ensuring they offer both digital and in-person services to meet evolving consumer needs.
Consumer Banking Driving Financial Performance
Bank of America’s consumer banking division remains a key driver of its financial success, contributing to nearly 38% of its net income in the second quarter of this year. This underscores the importance of the bank’s physical locations in supporting its overall financial performance, as they provide a vital platform for engaging with customers and selling high-margin financial products.
Reviving the Mortgage Market
The timing of Bank of America’s expansion announcement coincides with a recent interest rate cut by the Federal Reserve. Levine expressed optimism about how the rate cut will impact the mortgage refinancing market, which has seen little activity in recent years. “The refinancing market, which has been dormant for years, is about to see a revival,” Levine said, adding that the bank also anticipates an uptick in the broader housing market as lower interest rates make home purchases more affordable for consumers.
Looking Ahead
With its plans to open over 165 new branches by 2026, Bank of America is positioning itself to capture more market share in financial products while adapting to the growing role of digital banking. By offering both in-person and online services, the bank aims to meet the diverse needs of today’s consumers, combining the convenience of digital banking with the personal touch of face-to-face interactions.
As the banking landscape continues to evolve, Bank of America’s strategic expansion could set the stage for increased competition with other financial institutions, particularly as it looks to enhance its mortgage and investment offerings in a changing economic environment.
