Editor’s note: This article was first published in April 2012; its forecasts and figures, including 35% of branches (about 20,000) closing within three years, over 41,000 job losses and the staffing comparison with Germany and the UK, are from April 2012.
A report by Spain’s Instituto de Estudios Bursátiles (Institute of Stock Market Studies) estimates that 35% of the bank branches across Spain must disappear (and will in fact close) over the next three years. That means around 20,000 branches, leaving a total of roughly 30,000 branches nationwide for now.
There are too many branches and banks are under pressure to cut costs, so the Spanish financial sector is expected to shed more than 41,000 workers. In Spain the average bank branch has 6 workers, compared with an average of 15 per branch in Germany and 40 in the UK. Another cost-cutting measure will be to stop having a manager for every branch, so that a single manager can cover several branches, or every branch in a province, depending on business volume.
What will the bank of the future look like?
It’s no secret that online banking will end up dominating the sector. More and more people are inclined to do everything they can online, and they only set foot in a branch when they need to sort out something they can’t resolve that way.
As far as possible, bank branches will stop being places for transactions (deposits, transfers, statements…) and become places for advice and sales. Some banks are already studying Banco Santander’s system, in which some of these sales points are run by official bank agents.
Banking could be split into three separate services, such as retail banking, private banking and business banking, with each team handling customers’ requests according to the type of banking they belong to.
See also: Bankia’s new banking terms
Banks will choose to increase teleworking among their staff, so they can hire the people they need to handle requests regardless of where the worker lives (another way of cutting costs).
Today, according to the same report, 70% of banking operations are already carried out from home or from a mobile phone. Younger users and businesses have the fewest problems doing these transactions online, so branch closures will have very little impact on customers, and banks’ profits will rise as they cut these costs.
Banks are also in the middle of diversifying their business model, moving into real estate, where they hold a very dominant position, and into insurance (with certain advantages).
That said, and looking to the future, the truth is that with fewer branches and staff, choosing a bank with healthy accounts for our investment portfolio may be one of the most profitable long-term investments.
The bad news from this progress in banking, obviously, will be for branch workers and for our country’s unemployment figures.
Featured image: TaronjaSatsuma, CC BY-SA 3.0, via Wikimedia Commons.
