The main cause of branch banking’s expected demise is the maturation of the Internet and mobile devices such as cell phones as a way to do business. Those platforms are quickly replacing brick-and-mortar buildings as the preferred location for consumer banking.

Bank research firm TowerGroup predicts online banking—not community branches—will be the primary point of contact between banks and customers within 10 years. TowerGroup analyst Nicole Sturgill says in a research note that more than 80% of individuals up to age 55 use the Internet for some form of banking (checking balances, reviewing statements, transfers, etc.). More than 90% of consumers 34 or younger bank online.

“All channels are currently necessary to serve the customer, but that usage is slowly trending away from the branch,” Sturgill says.

A decade ago, bankers fascinated with the newfound power of the Internet began to chant the “clicks not bricks” mantra. They pointed to new strategies for generating growth online rather than expanding the branch structure. The dot-com bust slowed online banking growth. But as Internet users mature and digital capabilities improve, online banking is in vogue again.

At BofA, 29 million customers conducted more than 3 billion transactions online in 2008, the bank says. About 3 million of the bank’s customers use mobile banking on cell phones. And BofA set a record in June with 21 million deposits at new image-capable ATMs.

“The consensus seems to be that people under 30, probably now even under 40, simply don’t use the branch,” FTN Equity Capital Markets Corp. analyst Jeff Davis says in a SNL Financial report.

To close or not close?

Analysts agree the branch structure can be expensive to maintain, with its real estate and maintenance costs and payrolls. But closing branches en mass isn’t viewed as the best way to consolidate because it could create a public-relations nightmare among older customers.

“Ma and Pa Kettle come out of the woodwork to complain when you start closing branches,” Plath says.

Instead, many believe the best way to reduce branch systems is to close their doors through attrition, combining aging branches into one center and cautiously shrinking the branch network in particular markets. Davis compares it to the gradual shift phone companies have made to mobile devices.

“Branches won’t simply go away, but the banks’ investment in real estate will be much, much lighter over time,” he says.

Sturgill, the researcher, recommends that banks channel their resources to make online operations “the one and only” place for customers to fulfill all their financial needs.

And if 26-year-old consumer Ryan Hollingsworth could conduct all his banking business online, would he ever visit a branch again?

“No,” he says. “Never.”