NEW YORK (AP) — In a story Feb. 24 about JPMorgan Chase closing bank branches, The Associated Press misspelled the name of a JPMorgan executive.
His name is Barry Sommers, not Barry Summers.
A corrected version of the story is below:
JPMorgan to close 5 percent of bank branches to cut costs
JPMorgan to close 5 percent of its branches as customers go mobile and the bank cuts costs
By KEN SWEET
AP Business Writer
NEW YORK (AP) — JPMorgan Chase 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 staffed full of tellers 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. Along with ATM deposits, banks have introduced 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 cost the bank three cents, a fraction of the cost of a traditional teller deposit.
Still, bank branches are still important for the foreseeable future. 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.
"There will be less tellers that will help with every day functions, but the branches will have more offices available for advice," Barry Sommers, CEO of consumer banking at JPMorgan, said to investors.
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.
JPMorgan is not the only bank to announce changes to its branch network due to changing consumer habits. Citigroup has plans to close or sell 60 branches this year, on top of the 130 it sold or closed in 2014.
"What we are seeing is a long-term reconfiguration of what a bank branch does," said Ed O'Brien, a banking industry consultant at Mercator Advisory Group. "Even as customers move online, they still want to a person to talk about wealth management, mortgages or their small business."
Shares of JPMorgan Chase & Co., rose $1.62, or 2.8 percent, to $60.97 in late afternoon trading Tuesday.
Follow Ken Sweet on Twitter at @kensweet.