169-year-old bank to close 26 branches in major shift

Not long ago, visiting a bank branch was a routine part of managing money, whether opening an account, depositing funds, or cashing a check. Today, that experience is becoming increasingly rare.

The rapid adoption of digital banking has significantly changed how consumers interact with financial institutions. Mobile apps and online platforms now allow customers to move money, monitor accounts, and access services instantly, eliminating the need for in-person visits for most everyday transactions.

As a result, banks are reassessing the size and purpose of their physical networks. What was once the foundation of retail banking is quickly becoming a secondary channel, as customer demand shifts toward digital-first solutions.

This transition is already reshaping the industry. Major global banks are restructuring operations, reducing branch footprints, and investing heavily in technology to align with changing consumer behavior, accelerating a long-term shift toward digital banking models.

Santander confirms closure of 26 branches

Santander (SAN) is closing 26 branches across the UK in May 2026, underscoring how quickly online banking has become the dominant channel.

This move is part of a broader plan to shut down 44 locations, affecting 291 jobs, the BBC reported. After the closures, Santander will operate 305 UK branches, including 244 full-service locations.

The decision follows a pattern of consolidation across key markets:

UK: 95 branch closures announced in March 2025, impacting 750 employees, as reported by The Guardian.U.S.: 18 branches closed in 2025, Banking Dive reported.

While branch closures often raise concerns about job losses and local access, they also reflect a measurable shift in how customers choose to bank.

In some communities, particularly rural and older populations, reduced branch access can still create friction for customers who rely on in-person services. However, for most users, digital channels are increasingly meeting their day-to-day banking needs.

Santander is closing 26 branches in May 2026.

Mike Kemp/In Pictures via Getty Images

The rise of digital banking reshapes Santander’s business model

Santander operates in nine core markets across Europe and the Americas, serving approximately 176 million customers throughout roughly 7,000 branches as of March 2026, according to the company’s website.

Despite this large physical presence, customer behavior has changed dramatically. About 96% of Santander’s transactions are now conducted digitally. That figure highlights how branches are no longer the primary transaction channel, but a complementary service layer.

“Santander Bank continues to refine its branch footprint and retail presence, including introducing new formats and investing in digital capabilities to better accommodate our customers and meet their evolving needs,” a Santander spokesperson told Banking Dive.

The company’s performance reinforces that shift. According to Santander’s first-quarter fiscal 2026 earnings report, digital customers increased 2.4% year-over-year.

The bank’s U.S. digital platform, launched in April 2025, further illustrates the momentum. It has already attracted more than 235,000 customers and reached $11 billion in deposits, with balances growing 42% year-to-date and 210% year-on-year. 

Those figures indicate that digital channels are not only replacing branch activity, but they are also becoming a primary driver of deposit growth and operational efficiency.

Previous coverage on operational efficiency and store closures:

Personal care retail chain quietly closes 92 storesA major retailer scales back after expansion misstep72-year-old mall retailer to close more stores in 2026

Santander’s long-term strategy reflects that reality. The bank aims to reduce its cost-to-income ratio to around 36% by year-end 2028 by streamlining operations, simplifying processes, and adopting a more agile operating model. Central to this effort is the rollout of a unified global technology platform designed to support the vision of becoming a “digital bank with branches.”

Digital banking becomes the norm

Santander’s strategy mirrors a broader industry shift. Digital banking is no longer an alternative; it is the primary way most consumers manage their finances.

According to a survey conducted by Morning Consult for the American Bankers Association (ABA):

54% of customers primarily use mobile banking apps22% rely on online banking via laptop or desktopOnly 9% prefer visiting a physical branch

Younger generations are leading this transition, with roughly two-thirds of Gen Z and Millennials favoring mobile banking apps, followed by more than half of Gen X. 

However, adoption spans all age groups. Among Baby Boomers, 41% prefer online banking via a laptop or desktop, 38% use mobile banking apps, and only 12% visit branches.

“This survey further underscores how mobile banking has become an essential part of everyday financial life for many Americans,” said ABA Senior VP of Innovation Strategy Brooke Ybarra.

Industry researchers cited by the National Library of Medicine note that digital banking adoption continues to evolve, shaped by demographic trends and external shocks such as the COVID-19 pandemic, which accelerated the move away from physical banking channels.

Additionally, banks are also now competing on digital experiences as much as traditional factors like rates and branch access, raising the stakes for continued technology investments.

What this means for the future of banks

Santander’s branch closures are part of a larger, data-driven transformation across the banking sector. As digital adoption continues to rise, physical branches are being repositioned rather than eliminated, serving as support hubs for more complex or very specific operations.

Previous coverage on banks’ business strategies:

70-year-old bank chain closing 51 locations across 13 statesJPMorgan Chase hikes up annual fee cost of popular credit card

For customers, this shift means greater convenience and faster access to services. For banks, it represents an opportunity to reduce operating costs, improve efficiency, and scale services more effectively.

Related: CVS warns it may have to close over 100 more stores

#169yearold #bank #close #branches #major #shift