Santander to Shut Down 18 US Branches by August
In the rapidly evolving world of banking, a significant shift towards digital services is underway. This transformation is evident in the recent wave of bank branch closures across the United States, with Santander Bank leading the charge.
Santander Bank, a major player in the Spanish banking sector, announced last week that it would be closing 18 U.S. branches by August. This decision comes shortly after the bank's U.S. digital bank, Openbank, hit a milestone of $2 billion in deposits in February. The closures will affect branches strewn throughout the Northeast, with six locations in Massachusetts, four in New Jersey, four in Pennsylvania, two in New York, one in New Hampshire, and one in Rhode Island set to close.
The trend towards digital banking is not unique to Santander. In the first quarter of 2025, the pace of branch closures in the U.S. increased significantly. S&P Global reported 50 net branch closures for U.S. Bank, 23 for Wells Fargo, and 16 for Flagstar. Flagstar, in fact, has planned 60 branch closures for the year.
This shift towards digital banking by the industry has been ongoing for several years. The widespread adoption of mobile and online banking has significantly reduced customer foot traffic in physical branches, making in-person visits less necessary for a large segment of customers. As many routine transactions are now completed through apps and online platforms, banks are closing underperforming branches to cut costs.
Key factors driving this trend include declining demand for physical branches, the expansion of digital services, cost savings for banks, demographic shifts in banking preferences, and regional differences. The COVID-19 pandemic has accelerated consumer preferences for remote banking options, diminishing the need for branches. Mobile check deposits, bill payments, transfers, and other banking tasks can now be handled via phone or computer, reducing branch visits.
Maintaining physical locations is expensive, so banks aim to improve profitability by focusing on digital services and closing less profitable branches. Younger generations, such as millennials and Gen Z, predominantly prefer digital banking, whereas older generations like baby boomers are more likely to visit branches, although their share is smaller and declining.
While nationwide branches are closing, some areas are seeing bank expansions or renovations, indicating a nuanced strategy rather than uniform closures. For instance, in 2025, U.S. Bank announced closing 40 branches, Wells Fargo 49, Bank of America 27, and other major banks similarly reduced their branch networks to adapt to evolving customer behavior and technology adoption.
The closure plan follows 95 branch closures in the U.K., announced in March, attributed to "a rapid movement of customers choosing to do their banking digitally." Swati Bhatia, head of retail banking, stated that reaching the $2 billion deposit milestone for Openbank at record pace is a testament to their customer-obsessed mindset, commitment to innovation, and global connectivity.
In summary, the surge in closures and digital shift reflects economic rationales, pandemic-accelerated digital adoption, and changing consumer demands shaping the modern banking landscape in the U.S. in 2025. Dozens of other closures are scheduled for the upcoming months, signalling that this trend is set to continue.
Santander Bank's announcement to close 18 U.S. branches is a reflection of the significant shift towards digital services in the business sector, particularly in finance, enabled by technological advancements. The increase in branch closures across multiple banks in the first quarter of 2025, as reported by S&P Global, is evidence of this trend.
