With more and more people doing their banking online these days, the entire banking industry is undergoing a big transformation in New Jersey and across the nation.

Bank of America (Photo by Chris Hondros/Getty Images)

Experts said, overall, the industry is consolidating as the needs of customers continue to change.

"Nationally, and here in New Jersey, we've seen a contraction in the number of banks," said John McWeeney, CEO of the New Jersey Bankers Association.

Nationally, there were 6,509 banks at the end of 2014, that's in comparison to more than 7,300 banks at the end of 2011. In 1990, there were more than 15,000 banks.

In 2014, New Jersey had 98 headquartered banking institutions. In 2011, there were 111.

The number of bank branches is also on the decline.

"If you have bank A and bank B merging together, if they're in the same town, they consolidate in one location," McWeeney said.

There were 3,171 branch offices in June 2014, that's in comparison to 3,381 branch offices in 2008. "During that time frame we've seen a 6.2 percent decline in the number of branch offices in New Jersey," McWeeney said.

While bank mergers account for some of the contraction, customer preferences have also caused the decrease in the number of bank branches.

"What's really happening is more and more people want to do their banking on the Internet, so the number of transactions that are performed at a branch, at the teller line - whether it be a drive up teller or a walk in - the branch are dramatically decreased," McWeeney said.

It's a trend that is expected to continue and will likely result in fewer and fewer branches.

"We expect the trend to continue as the millennials and future generations come along, they just don't step foot in a branch anymore. They do their banking on their smartphone," McWeeney said.

Drive-thru lanes are also on the decline.

McWeeney said about 70 percent of banks still have drive-thru lanes, however, they have changed over the years. "A lot of the banks will convert the drive up teller now to a drive up ATM and people can go there 24/7 and do what they have to do."

So does this mean the end of bank branches with real, live people inside? Not exactly.

McWeeney said a recent survey by the American Bankers Association found 31 percent of customers prefer Internet banking, while 21 percent prefer branch banking.

And while the number of customers going to a bank branch will likely continue to decline, there will always remain certain tasks that are not ideal for online banking.

"For certain types of activities, a branch is probably more appropriate. For example, applying for a mortgage loan or maybe sitting down with an investment adviser - those things can be done online but some people would rather be in a branch," McWeeney said.

Brenda Ross-Dulan, regional president for Wells Fargo's Southern New Jersey Region, agreed with that assessment.

"While the trend is moving toward fewer branches and more banking online, the stores, or branches, are still important to provide person to person services for customers," Ross-Dulan said.

The various platforms employed to conduct banking allow all customers to pick what works best for them.

"It's all about providing the conveniences that allow customers to bank any way, anywhere. People do need options," Ross-Dulan said.