OCC head says US banks can't use the pandemic as reasoning to ramp up branch closures

• Temporary branch closures and lockdown measures are spurring customers to form habits around digital channels as the pandemic stretches on. Seventeen percent of US respondents to a J.D. Power survey from late May said they use their mobile banking app "a lot more often" since the crisis began, up from 11% of respondents who said the same when surveyed in early April. The longer the crisis persists, the more likely those shifts will become permanent.
  
  

• These changing behaviors are reportedly leading some banks to hope the pandemic will enable them to accelerate their branch closures, per the FT. Rising digital usage and lessened reliance on branches is making some banks rethink their networks in certain areas, such as those that were already seeing less foot traffic prior to the pandemic. As banks brace for massive loan losses, reducing branch networks could be a key way to reduce costs — and they may have expected they could point to plummeting branch visit numbers as justification to close physical locations.
  
  
• But some banks may opt to keep more branches open after all, in order to appease regulators. The US government has encouraged banks to play their part in cushioning the economic blow of the coronavirus crisis, and it has relaxed some regulations to do so, such as temporarily raising Wells Fargo's asset cap. But Brooks' comments to the FT suggest that these aren't long-term changes, and that maintaining branch access in particular will remain under the microscope even after the situation stabilizes. To stay on regulators' good side, banks may fall in line and not try to accelerate branch closures despite moves to digital.