Online banking threatens local branches
Being able to walk into a bank and speak to someone over a counter is a disappearing service in Switzerland. The number of branches has almost halved from around 4,500 at the beginning of the 1990s to some 2,500 today.
The reason for the 20% annual drop in branches is that more and more people are using e-banking: paying bills and keeping track of their finances online.
Andreas Dietrich, professor for Banking and Finance at Lucerne University of Applied Sciences and Arts, says it goes without saying that banks are reassessing their strategy. They are closing the classic model of a bank as a place where people would pay in and take out cash across a counter and are turning them into moneyless “meeting zones” where people can receive advice on a range of issues from pensions to mortgages.
These renovated bank branches are increasingly equipped with digital tools such as video screens and tablets.
However, Dietrich pointed out to Swiss public radio, SRF, that banks couldn’t afford to decimate their network of branches: without having a local presence they wouldn’t be able to keep or improve their market share.
Some have even boosted their local presence. Migrosbank, the banking arm of the Migros retail group, has increased the number of its branches from 44 in 2006 to 67 today. PostFinance branches have almost doubled from 24 to 43 over the same period.
Not over yet
Although the banking industry is unanimous that counter transactions will soon disappear, that time has not yet come. Cantonal banks, for example, are keeping one counter open if they turn a branch into a meeting zone because they still have many customers who don’t do their banking online or via an app.
“Already in the 1980s and 1990s people were saying bank branches were dead – and there are still 2,500 of them,” Dietrich said.
Personal contact was still very important for many people who wouldn’t let banks force them onto the internet, he explained.
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