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North Bay branch closures in 2020 part of shift to digital banking

More than 3,300 bank branches across the nation closed last year — a sign of mobile banking’s convenience and COVID-19’s influence, bank officials say.

Among the North Bay financial community, Wells Fargo and Citibank closed branches in Sonoma County. Chase temporarily suspended operations at its south Napa location, while Mechanics Bank closed two branches in the Wine Country city, according to an S&P Global Market report.

With Mechanics Bank, the Walnut Creek-based financial institution shut down two on Soscol Avenue and California Boulevard, leaving the 700 Trancas St. location open.

Mechanics Bank spokesman Greg Jones insisted much strategy goes into the closure of banks. Jones said the size, location and parking opportunities are major factors in making the prudent choices.

“If you look at the trends in multiple years, banks have been eliminating branches for a variety of reasons,” said Dan Aguilar, another Mechanics Bank senior vice president. “With the technology, fewer clients use those (in-person) services. Most banks continue to have branches but might not need so many of them.

The pandemic “accelerated” the trend to avoid going into a branch and banking online.

“We’ve definitely seen branches close over time,” California Bankers Association spokeswoman Beth Mills said, further agreeing the coronavirus outbreak exacerbated the trend. “The foot traffic wasn’t there.”

A Federal Deposit Insurance Corporation report stated 34% of U.S. households used mobile banking in 2019. The FDIC, which is an independent agency created by the U.S. Congress to instill trust in the nation’s financial system, tracked that trend since 2015, when only 9.5% used a phone to bank.

Still, with all the convenience and ability to circumvent a line of people by using electronic devices, some financial institutions have found the importance in maintaining a presence as a pillar in the community.

Mills believes branches that remain may face the coming years with a unique look and twist. For example, customers may see more use of kiosks for banking services in the lobby.

“We’ll probably have kind of a mix. It’s nothing to be concerned about,” she said, noting some banks are bucking the trend of closing branches.

At the height of the COVID-19 outbreak in April, JPMorgan Chase temporarily shut down its south Napa branch a year ago, but the finance center plans to reopen it in the summer with additional staff. It also just opened a new branch in Hercules.

“We’re marrying the digital and the physical,” spokeswoman Christina Dello Buono said. “Branches are still important to our customers.”

Chase reports that one million customers enter its locations every day.

Dello Buono said the bank is viewed differently among customers finding a place “for advice and conversation,” pertaining to more complex transactions such as buying a home or securing retirement funds.

Even affiliated financial companies have noticed the trend.

“I think so many business functions have moved online. This has been a long time coming, but the pandemic accelerated it,” said Andrew Reiser, CEO of Kapitus.

The New York company that provides capital to small businesses predicts that even a good majority of seniors may be all in when it comes to online banking as more and more become more acquainted with technology.

“If you know how to sign onto a computer, you can do it,” he said. “Once they give the basic information, then they won’t be afraid.”

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