Almost exactly two years after Bank of America rolled out its “eBanking” checking account that costs nearly $9 a month if the customer wants service from actual human tellers, the bank’s recent quarterly report shows that it’s eliminated nearly 9% of its ATMs around the country. In the past year, the megabank shut nearly 1,600 machines, with most of the closures coming in the first half of 2012.
The ATMs aren’t at Bank of America branches; most are at Valero gas stations and in malls owned by Simon Property Group. Bank spokeswoman Tara Burke says they were closed because customers couldn’t access them 24/7 and they only dispensed cash, so people couldn’t make deposits at them. She says the bank isn’t planning any more big reductions in its ATM numbers.
It’s no secret that banks have been nudging their customers toward ATMs for a while now; machines can work 24/7, they don’t take sick days, ask for raises or need health insurance. Some banks and credit unions have been investing in ATMs that can do all sorts of tasks that used to require a teller, and a few even have remote tellers the customer can talk to via video-chat.
Bank of America is in the midst of an $8 billion cost-cutting mission that has included layoffs and branch closures. Ironically, futuristic ATMs have been flagged as one of the reasons BofA was able to lay off 30,000 consumer banking employees.
A banking industry analyst tells Bloomberg News that the gas station and mall machines cost more for BofA to operate; the bank has to rent the space from the property owner, and dispatching armored vehicles to refill them with cash adds to the expense of the operation. Another analyst estimates that it costs around $1,700 per month to operate these off-site ATMs, $600 more than the cost of operating an ATM at a branch, meaning the closures would save BofA roughly $32.5 million a year.
That’s good for BofA, but the down side is that customers who relied on those shuttered machines to grab cash have to deal with finding a conveniently located BofA branch or coughing up the surcharge to use another institution’s ATM. Dieringer Research Group conducted a survey last year showing that roughly three quarters of consumers consider conveniently located ATMs important when choosing a bank, and more than half say the overall number of ATMs is important.
Burke says BofA customers do their banking at all hours. Higher-tech machines that let them do whatever, whenever are important. Hopefully customers who were regular users of the closed ATMs will be lucky enough to have one of the bank’s remaining 16,200 ATMs nearby.