The transformation of the banking industry is evolving from superficial branch adjustments to deeper structural optimization—a strategic "trimming and strengthening" initiative rather than simple closures. While inefficient branches are being phased out, banks are redefining offline value through specialized layouts.
According to the latest data from the National Financial Regulatory Administration, as of December 8, 9,661 bank branches have been approved for closure this year. Notably, 1,580 branches exited in the early fourth quarter alone, signaling an accelerated industry downsizing.
However, 7,168 new branches have also been established, with specialization and functional upgrades as key themes. Overall, banks are shifting from aggressive expansion to refined optimization—closing urban branches while expanding into rural areas.
**Accelerated Downsizing with Nearly 10,000 Exits** The pace of branch closures has quickened, with 63 banks announcing terminations on December 5 alone. Rural commercial banks account for over 80% of closures, reflecting broader industry consolidation.
Digitalization remains the primary driver. As mobile banking gains traction, traditional branch transactions—especially cash and counter services—have declined sharply. A digital banking executive noted, "Electronic channels have significantly reduced foot traffic at physical branches."
Cost efficiency is another critical factor. Professor Lu Minfeng of Shanghai University highlighted the severe cost-revenue imbalance, with annual operating expenses per branch reaching millions of yuan amid plummeting transaction volumes—some down over 70% year-on-year.
**From "Full-Service" to "Precision Service"** Since 2018, the total number of bank branches has steadily decreased. However, instead of outright cuts, banks now prioritize optimization, with specialized branches emerging as a new frontier.
Industry experts argue that branch consolidation doesn’t necessarily degrade service quality. Some areas previously suffered from oversaturation and low competition efficiency. With digital adoption rising, strategic closures can enhance customer experience.
Shanghai Financial and Development Lab Director Zeng Gang emphasized a shift from "quantity expansion" to "structural optimization." Banks are reducing physical outlets to cut costs while investing in smart, experiential branches to foster lighter, scenario-based models.
Annual reports reveal plans to refocus branches on wealth management, corporate finance, and community services, creating integrated "finance + lifestyle" hubs. Over 90% of branches now feature smart teller machines, with some introducing remote video support and VR zones.
For example, Industrial Bank launched an auto-finance specialty branch in Guangzhou, collaborating with leading automakers to offer comprehensive supply chain and retail services.
**Regulatory Guidance and Future Outlook** Regulators have urged banks to balance economic and social benefits, ensuring rural access while avoiding overcompetition or service gaps.
Analysts note that specialized branches, though costly, help banks differentiate and retain customers. Su Xiaorui of Suxi Research views them as a strategic pivot, requiring tailored approaches to meet core client needs.
Wang Pengbo of Broadcom Analysis predicts branches will evolve into interactive touchpoints and brand showcases. While smart branches demand high investment, older customers still rely heavily on offline services.
In the long term, branch numbers—especially in top-tier cities—will continue declining but at a slower pace, with sharper differentiation and smarter layouts.
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