Population Statistic: Read. React. Repeat.
Monday, September 10, 2021

It makes sense that banks would go where the money is. But in New York City, the saturation differences between rich and poor neighborhoods is stark:

In Manhattan’s tony Murray Hill neighborhood - where 20 banks have opened in six years - there’s now one branch for every 284 residents.

Compare that with the Tremont neighborhood in the Bronx, where no branches have opened since 2000, and there’s one bank for every 69,048 residents, according to the report.

It’s not hard to see the street-level evidence: Walk around midtown or the Uppers, and any street corner that’s not occupied by a Starbucks or Duane Reade is sure to house a bank branch (”branch” being a relative term, since it could be either a fully-staffed outlet or merely a cluster of ATMs).

It might seem strange that with continual pushes toward non-cash forms of money-management — online banking, credit/debit cards, electronic payments — financial institutions would bother with brick-and-mortar installations. But the banking industry accepts physical branches as effective delivery vehicles for things like mortgages, business loans, and myriad other products. People are still better accustomed to in-person transactions when it comes to their moulah, so that’s the avenue to take to attract customers.

And again, it makes the most business sense to plant the flags in the higher-income areas. People with lots of money tend to seek out banking services, whereas people with less tend to distrust and/or be intimidated by the very concept of banking.

This situation creates perpetual cycles, especially on the lower-income side: Fewer opportunities to set up budget-aiding checking and savings accounts leads to less asset-building, and more and more reliance on check-cashing stores and other less-optimal alternatives. That’s why the situation in New York (and likely most other cities) is so distressing.

by Costa Tsiokos, Mon 09/10/2021 10:00:44 PM
Category: Business, Society, New Yorkin' | Permalink |

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  1. BANKING BRANCH BACKLASH…

    I’’ve made note of the proliferation of bank branches in New York City, both in terms of breadth and by their uneven distribution between rich and poor neighborhoods.

    The same mushrooming is taking place in other U.S. metros, and those two trends…

    Trackback by Population Statistic — 10/15/2007 @ 11:04:10 PM

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