The acceleration in the closure of bank branches as a result of Covid-19 is undeniable, as banks intensify their cost-cutting efforts and customers shift to digital services. Marion Duermael, Project Manager at TriFinance Financial Institutions, has analyzed a UK pilot program in which banks are working together on shared infrastructure, to avoid maintaining expensive individual branches. This is what she read in the press and how she sees the evolution in this regard for Belgian banks:
How to remain accessible while closing branches?
In our increasingly cashless society, a significant segment of the population continues to value access to cash and face-to-face relationships, and regulators are considering rules that would block branch closures under certain conditions.
One solution for banks is to share branches. Two ‘bank hub’ pilots in Rochford (Essex, England) and Cambuslang (near Glasgow, Scotland) have recently been extended until at least April 2023, and the organizers behind the project are optimistic that the model will now be rolled out in other parts of the country.
Meeting the needs of customers in a different way
The two hubs allow five banks to share an office for existing customers, with each bank allocated one day of the week. Additionally, the UK Post Office provides a dedicated daily counter for basic services, such as withdrawing or depositing cash.
The one-size-fits-all bank branch network is evolving. The actual number of branches is shrinking, but those that remain are looking to meet the needs of customers in different ways. The shared branch pilots in the UK are one example of this evolution.
Our banks have proven that they know how to work together, at least with regard to payments and KYC infrastructure.
Marion comments: "All ingredients are present for our banks to launch the same concept as Belgium has also known the recent closure of many branches: BNP Paribas Fortis closed 123 branches in 2020, and plans to close 267 other branches of the 678 remaining by the end of 2021. The same trend can be observed at the other banks: half of the branches, all networks together, have been closed in the last 10 years!
Furthermore, with initiatives such as Batofin / Jofico, Isabel and Kube, our banks have proven that they know how to work together, at least with regard to ATM cooperation, payments and KYC infrastructure."
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