Cash Automation
Rising Bank Closures—& How the Retail Tech Industry Is Responding
As bank closures increase, it's difficult for small businesses to access accounts and make regular deposits. Smart safe technology can help.
For many customers, “going to the bank” is simply going extinct. Digital spending and digital banking services offered by today’s top banks are leading to the closure of branches by the thousands. But where does that leave customers that still regularly deposit large amounts of currency—like retailers? In a bad spot. Learn how technology is helping here.
Bank Closures: By the Numbers
As consumers shift their spending habits to tap into emerging technological advancements—from digital banking to digital consumption—banks have responded to protect their bottom lines and their clientele. For many customers, this seismic shift to digital has all but eliminated the need to visit brick-and-mortar banks—so banks, in turn, are closing them.
According to a 2022 study from the National Community Reinvestment Coalition (NCRC), 9% of all bank branches in the United States closed between 2017 and 2021: a total of 7,500 branches nationwide. More recent data from S&P Global Market Intelligence reports that 2,454 U.S. branches closed in 2023 alone.
Bank Closures: The Causes
What’s behind the bank closures? The biggest answer is digitization—of both banking and consumption—but it’s not the only one. Here are a few of the largest factors driving bank closures across the United States and the world.
The rise of digital banking
Today’s top banks offer a host of digital banking features that allow consumers to conduct an array of banking business straight from their phones or computers. This includes moving money from account to account, making payments, depositing checks, and even applying for loans.
The on-paper advantages of digital banks (better rates)
The more digital a bank is, the lower its overhead costs typically are. This, in turn, allows many online banks to offer some of the best rates in their savings and checking accounts.
The shift to digital consumption
While the features of digital banks and their attractive rates are bringing customers to digital banking, consumers are going digital in many other areas, too. Take online shopping, for example. When customers can use credit cards or other online payment methods to complete transactions, there’s no need to involve a brick-and-mortar bank for in-person transactions.
The COVID-19 pandemic
As if digital commerce didn’t have enough going for it, 2020’s COVID-19 pandemic briefly made it the only game in town. The era of shelter-in-place—and it’s long-tail return to normal—left lasting traces of the “new normal” in its wake. COVID-19 led to thousands of brick-and-mortar bank closures while creating countless new digital converts; and many of them have never looked back.
Bank Closures: Bad News for Many Businesses (Right Now)
At first glance, brick-and-mortar bank closures seem like an inevitable changing of the guard that’s benefitting everybody. Customers’ lives are made easier; and banks themselves save money. But there exists a few key demographics for whom the banks’ close en masse has been bad news. Among those demographics are retailers who deal with cash.
In short: bank closures have made it difficult for retailers—especially small business retailers—to deposit cash into their accounts. As a result, they are forced to either keep their cash on hand, which is incredibly risky or travel long distances to get to another branch. But there is good news. Advances in technology are helping both banks and retailers keep their cash safe and competitive in the digital age.
How Retailers Can Adapt to Closing Branches
As bank closures increase, it becomes more difficult for small businesses in rural areas to access their accounts and make regular deposits. However, retailers can take advantage of this opportunity by utilizing technology to fill the gap left by a declining bank branch presence. For example, some retailers have begun to offer in-store bill payment and money-transfer services. Another effective option available to retailers who need to make regular deposits is to install automated cash-management technology—like smart safes and customer-facing deposit solutions.
How Smart Deposit Technology Can Help
Retailers using smart safes can accept cash payments without worrying about making a trip to the bank to deposit their cash. More than simple storage devices for cash, smart safes facilitate the depositing of cash into bank accounts faster and more conveniently, allowing retailers to secure their earnings.
With smart safes, cash deposits can be credited to the retailer’s bank account, typically by the next business day. The smart safe sends an electronic record of that day’s cash deposit to the retailer’s bank. The deposit is then credited to the store’s account, negating the need for store personnel to travel to a physical bank branch to make the deposit. These highly intelligent devices leverage a robust combination of hardware and software to provide security for cash and other valuables.
When retailers adopt smart safe technology, the negative effects of bank branch closures are all but eliminated. Smart safes have proven to be an effective tool for retailers to enable an environment based on greater security and cash transparency, while providing faster access to working capital. Furthermore, smart safes can be monitored remotely, so retailers can keep track of their cash from the comfort of their own homes, while traveling, and even when their store is closed.
The Verdict: Retailers Must Leverage New Technology
Bank branch closures aren’t slowing down anytime soon. And while they may be inconvenient in the short-term, they can be addressed with technology for success in the long-term. Retailers and small businesses are the backbones of many communities—and they can continue to stay competitive in the face of bank closures by implementing technology to streamline cash management.
Sesami Solution Experts
The team at Sesami.io consists of innovative and skilled professionals with deep expertise in industry trends and technical knowledge. They have a proven track record of guiding businesses through numerous technology cycles, especially in the retail and financial sectors. Their work involves creating cutting-edge solutions that set new standards for how companies leverage digital technology. Renowned for their analytical skills and strategic insights, the team has led numerous transformative projects, positioning themselves as key influencers in the technology field. Their unwavering commitment to excellence and their drive to expand the possibilities of technology makes them trusted partners in managing the complexities of today's digital world.