Over the last decade, banks have closed more than 18,000 branches in Spain. Will there be a new wave of closures in 2018?
Following the crisis, the financial system underwent a drastic restructuring with the disappearance of entities and the subsequent closure of branches, a process that was carried out in a non-traumatic manner. Added to this is the digitalization of financial activity, which represents a challenge for banks in their permanent objective of adapting to the demands of their customers, who are increasingly inclined to receive service through digital channels.
Where do we stand in relation to our European neighbors in this area?
Spain registers a higher density of bank branches than other European countries, according to ECB statistics. In Spain, there is one branch for every 1,613 inhabitants, compared to an average of one branch for every 2,170 inhabitants in the eurozone.
What is the reason for the closure of branches? Is it the bitter side of digitalization?
The customer is and will be at the center of the banks’ strategy and, in that process, commercial structures are adapting. More and more customers want to complement their relationship with their bank through the branch with service through other channels such as mobile phones or the Internet. But digitalization does not make human work obsolete; quite the opposite. Employees are the banks’ main asset and their training to serve the customer is constantly increasing.
Is the closure of branches leading to an increase in financial exclusion? Is online banking the solution?
92% of the Spanish population lives in municipalities with branches of at least two different entities. AEB banks offer, in some cases, mobile branches and commercial associates that function like a branch, while cards, points of sale, and ATMs are also growing in Spain. At the same time, more and more customers demand service through digital channels and banks are always willing to provide them with the necessary training to benefit from it.
If the banking sector’s commitment to digitalization continues, can we expect more synergies between the sector and fintechs?
Banks and these companies work together to modernize and make financial operations more efficient with the aim of providing a better response to customer needs. On the other hand, if we take into account that Fintechs are companies that use new technologies to provide financial services, we must also consider banks as Fintechs.
One of the advantages of digitalization is that it has blurred borders. In recent years, new online banks from other European countries have appeared in Spain, especially mobile banks. Will this new digital ecosystem favor competition and the entry of new players into our country?
Competition is always positive for the customer. Spanish banks, many of them international, are prepared to offer the best service in a world as competitive as today’s and are more efficient than their European competitors.
Does the future of banking involve the creation of pan-European banks?
The culmination of the Banking Union is the creation of European entities. We already have large national banks with a European and international presence.
Much has been said about the advantages of digitalization, but are there disadvantages beyond the fact that it may favor branch closures?
Digitalization undoubtedly offers many opportunities to banks. It improves their efficiency and allows them to offer new services with greater added value to the customer. However, it also demands great efforts from banks, as it requires a high investment in the short term.
One of the hurdles many customers currently face is that they cannot contract products such as loans or mortgages online if they are not already customers of the bank. Is this the next step?
Branches are evolving into advisory centers to provide more complex financial services to customers. But it is the customers who must decide how to approach their bank. And beyond the obligations entailed by strict banking customer protection regulations, customers still lean toward visiting the branch when it comes to complex products.
José Luis Martínez Campuzano, AEB Spokesperson
