US financial services major JPMorgan Chase is starting to phase out its safe deposit box service from its branches, Bloomberg has reported.
The Wall Street bank will no longer allow customers to rent new boxes, an offering associated with traditional bricks-and-mortar branches.
If the bank closes the Chase bank branch, its safe deposit box service will also stop and its holder would not be allowed to rent a new box at another location.
“We made a business decision to stop offering new safe deposit boxes as of December 2021, but that does not affect current customers who have boxes,” said JPMorgan spokesperson Tom Kelly was quoted by the publication as saying.
The safe deposit box services have been offered by banks for decades to allow customers to safe keep valuable items.
The decision to halt this service comes as the banking giant closes its branches at a record pace due to an increase in digital banking.
For banks, the service has been associated with losses as banks need to have space and staff to manage the business, according to Safe Deposit Specialists consultancy.
“It is the most expensive square footage you can put in a new branch,” Safe Deposit Specialists president David McGuinn told the publication in an interview.
“If you calculate building a vault, putting a security system on it, there is $10,000 worth of boxes, you have to train your people on it. It is not a cheap service.”
Earlier this week, a media report said that the US bank is looking to hire some 2,000 engineers across roles such as general software engineering, data science, cyber security, and cloud computing among others.