The Rise of Mobile Banking and the Displacement of Brick-and-Mortar Branches, 2014-2019

26 Pages Posted: 21 Apr 2021

See all articles by Hugo Dante

Hugo Dante

George Mason University

Christos Makridis

Stanford University; Columbia University - Columbia Business School; Arizona State University (ASU); Department of Veterans Affairs (VA)

Date Written: April 8, 2021


The share of households using mobile banking has increased from 16% to 28% between 2014 and 2019. Using data across all census tracts between 2014 and 2019, we investigate the incidence of mobile banking and its relationship with traditional brick-and-mortar bank branches. First, we document three stylized facts: mobile banking is more common in areas with a higher concentration of individuals employed in information and professional services sectors, areas with higher shares of college graduates, and areas with a higher share of youth between ages 18 and 30. Second, we estimate the elasticity between mobile banking and both the incidence of banking deserts and the number of physical bank locations. Exploiting within-tract variation and controlling for time-varying shocks, we find that residents of banking deserts are 1.3-4.7% more likely to have mobile banking and that an additional physical branch opening, net of closures, is associated with a 0.3-0.7% decline in mobile banking usage. Our results suggest that mobile banking can serve as an important vehicle for financial inclusion by providing an alternate avenue for consumers to access banking services, particularly in rural communities.

Keywords: bank closures, fintech, mobile banking, online banking

JEL Classification: D14, G21, G51, O33

Suggested Citation

Dante, Hugo and Makridis, Christos, The Rise of Mobile Banking and the Displacement of Brick-and-Mortar Branches, 2014-2019 (April 8, 2021). Available at SSRN: or

Hugo Dante

George Mason University ( email )

4400 University Drive
Fairfax, VA 22030
United States

Christos Makridis (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Arizona State University (ASU) ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Department of Veterans Affairs (VA) ( email )

810 Vermont Avenue NW
Washington, DC 20420
United States

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