HSBC said it would sell 90 of its 148 retail outlets and withdraw from mass market retail banking. It will eventually “close” other branches. Many of the accounts of HSBC customers will be transferred to citizens and Cathay, the acquiring banks. This has exacerbated the trend of the disappearance of the real banking business, which closed to a record high last year. If you are banking with HSBC, you may soon need a new home to keep your money. The banking giant said it was pulling out of mass market retail banking, continuing a trend in which net closures of bank branches hit an all-time high in 2020.
If you have an account at one of the branches, the account will be transferred to the acquiring bank unless you decide to close the account. HSBC plans to eventually “shrink” 35 to 40 additional branches and transform the remaining into 20 to 25 “international wealth centers” focusing on high net worth customers. The company said it would contact the affected customers to inform them of their options.
When banks close branches, they are required by law to inform their customers whose accounts will be affected, and customers must decide what they want to do with their own accounts. Usually, the bank will transfer the account to a nearby branch. Usually, distance is not an obstacle. “The difficulties of extreme distance are atypical,” the report said This is the latest in a series of bank decisions to close physical stores. Although U.S. banks and thrifts have been reducing the presence of physical stores for years, the pace accelerated in 2020, closing a record number of stores. When the government shut down businesses last year to slow the spread of the covid-19, people were forced to adjust quickly to almost everything online, including banking. Banks and thrifts take this opportunity to reassess how much physical location they really need.
So, if your branch is closing and there is a problem with distance, what should you do? Online and mobile options are usually available. If you face the prospect of having to go to the bank, consider whether it offers enough digital services to minimize personal visits. Most major banks also offer some telephone deposits as well as electronic payment and transfer services.
Also consider the importance of ATMs to you. You may find that ATM is not required. With all the automatic payment options such as Zelle, venmo, paypal and apple pay, people are using cash less and less, except for credit and debit cards. A study by Travis Credit Union last August showed that Americans are now twice as likely to buy goods with a debit or credit card as with cash. Only 16% of Americans always carry cash with them.