Investor's wiki

Branch Banking

Branch Banking

What Is Branch Banking?

Branch banking is the operation of retail facade locations from the institution's work space for the convenience of customers.

Since the 1980s, branch banking in the U.S. has gone through huge changes in response to an additional competitive and consolidated financial services market. One of the main changes is that, beginning around 1999, banks have been permitted to sell investments and insurance items as well as banking services-under a similar rooftop.

Understanding Branch Banking

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 authorized all around promoted banks to secure branch offices-or open new ones-anyplace in the United States, including outside their home states. Around then, most states had proactively passed laws empowering interstate branching. Then, in 1999, Congress revoked laws that had forced banks to keep their investment services separate from their banking services. Those two actions combined prompted the current multiplication of branch offices that are spotted around the U.S.

After the financial crisis of 2008-2009, the banking industry went through a consolidation phase. The branch bank, for most Americans, presently means one of the "large four" banks: JPMorgan Chase and Co., Bank of America, Wells Fargo, or Citibank.

Branch banking permits a financial institution to grow its services outside of its home location and into more modest customer facing facades that function as extensions of its greater operations. For certain institutions, this can be a cost-saving technique; it permits more modest offices to offer key types of assistance while bigger locations might have extra offerings.

Later innovations, for example, internet banking services and mobile banking applications, have decisively changed the banking scene.

According to a survey conducted by Morning Consult in the interest of the American Bankers Association, almost 3/4 of Americans-or 73% of Americans-most frequently access their bank accounts by means of online and mobile platforms. This addressed an increase over last year (72 percent).

Branch banking networks have advanced into multistate financial service networks that permit investors to access their accounts from any banking office.

Furthermore, the number of branch banks is decreasing. According to the American Bankers Association (ABA), there were around 86,000 bank branches and 19,000 credit union branches as of June 2019.

Banks are constrained from closing a few branches by the terms of the Community Reinvestment Act of 1977, which expects banks to really try to offer types of assistance to low-and moderate-income areas.

Unit Banking versus Branch Banking

Unit banking alludes to a single, normally tiny bank that offers financial types of assistance to its neighborhood community. Regularly, a unit bank is independent and works with no connecting banks or branches in the area.

Nonetheless, not all unit banks are independent. Even on the off chance that they don't share a name with a bigger banking entity. There are a few banks that hold a recognizable name, even however they are owned by a bigger holding company.


  • In the event that you utilize a branch bank today, it is probably going to be one of the "large four" banks: JPMorgan Chase and Co., Bank of America, Wells Fargo, or Citibank.
  • Since the 1980s, branch banking has gone through huge changes in response to a more competitive national market, deregulation of financial services, and the growth of internet banking.
  • Branch banking alludes to the operation of customer facing facade side projects that offer similar key services as the institution's lead work space.