This year alone, thousands of bank branches had to close. Be it through the merger of banks or through digitization - the changes are striking. The latest example is Deutsche Bank, which wants to close every 5th bank branch. 1 The tasks of bank branches will change fundamentally in the near future. The decline in branches continues - and digitization is gradually gaining ground.
The requirements for advice have changed
When all branches of Sparda-Bank West were recently closed for a whole day, there was great uncertainty among the employees. Because, according to news reports, they had only found out about the plans of the corporate management a few hours earlier. But the banking company's customers also felt helpless. The fact is: it won't stay with a single day of closure. Rather, Sparda-Bank West plans to close a large part of its bank branches sooner or later. Deutsche Bank is also following suit. Every 5th branch of this renowned banking group will soon no longer exist. These and many other credit institutions want to cut costs. Literally “at any price”. With this in mind, they either merge their branches or they decide to close bank branches.
There is no end in sight to the bank closings
In retrospect, it has been foreseeable for a long time that German banks will gradually reduce their branch network. A look at the latest figures, however, shows that the branch deaths have now reached extremely memorable proportions. But the end of the story has still not been reached. According to experts, this sad “trend” will accelerate further in the next few years. The reasons are obvious. On the one hand, the banks have to save and focus on digitization. On the other hand, however, it is digitization that means that the branches of banks are continuously being eliminated.
The customer chooses new paths
The changes in the market are truly significant. The wishes and demands of customers have also changed. More and more customers visit a bank branch less and less. Instead, they opt for more modern contact options, which allow them to benefit from greater flexibility. The number of banks and credit institutions that are adapting to this “trend” is steadily increasing. Stuttgart BW-Bank as a subsidiary of Landesbank LBBW will reduce its branch network from 132 to just 100 by 2021. The situation is similar with the Nassauische Sparkasse in Wiesbaden, Hesse. Group management plans to close 25 branches by the end of the year. Hamburger Sparkasse is also joining the group and will shrink its branch network from 130 to 100 over the next few years.
Not every bank goes along with it
While there are banks that are currently closing up to 40 percent of their bank branches, others are reducing their branch network by up to 70 percent. Then again it turns out that there are banks whose branches only shut down occasionally. The strategy used in this regard differs from company to company. Despite the massive wave of “closings”, the bank branches will not completely disappear from the public eye. Because personal contact with customers is just too important for that. It is just as certain, however, that the service portfolio will change completely. Instead of the daily service, sales and advice for complex financial products will increasingly be in the foreground.
Closing bank branches - More and more accounts are being opened at digital and direct banks
Lower prices, excellent online and telephone service - these and other factors have an extremely appealing effect on quality-conscious, service-oriented customers. In light of this, it is not surprising that the number of account openings at digital and direct banks has increased explosively in the past few months. If you want to go to the bank “quickly” after work to do important things, you simply don't feel like having to stick to fixed opening times and standing in front of closed doors. The flexibility that digital and direct banks have to offer meets the expectations and demands of the “modern” very well. In this respect, it can be expected that more and more bank branches will close in the near future
The corona pandemic has shown that it is also possible to guarantee the best possible advice and support in a virtual way. It is appreciated that there is no longer any need to leave the house for important financial matters to speak to the bank advisor face to face. Both the exchange of information and the signing of contracts are conveniently possible by email or post. Legal security included. All of this creates trust and ensures security.
Will there be no more bank branches in the future?
Certainly it was and is associated with a certain uncertainty factor for some customers that more and more bank branches are closing. Regardless of whether it is about applying for credit or advising on complex financial products - the cooperation between bank advisors and customers is becoming easier and more customer-oriented in view of the steadily advancing digitization. More and more bank customers appreciate the fact that well-known credit institutions respond individually to their wishes and expectations - and that it is not even necessary to leave the house to take advantage of first-class services. In this respect, the fact that so many bank branches are closing can very well be rated as positive.
1 time online to "Deutsche Bank wants to close every fifth branch" (status: 22.09.2020)