Thursday, 19 Apr 2018

12% of bank branches could close by 2020

According to a study by the firm Sia Partners, the number of agencies in France would increase from 37,261 to 32,500 between 2016 and 2020. In question, the digitalization of the sector and the decline in agency attendance.
Will it still be possible to set foot in a bank branch in 20 or 30 years? If the question may seem excessive, the digitization of the sector will in any case be accompanied by a sharp acceleration of branch closures in France in the coming years. This is the main conclusion of a study conducted by Sia Partners, which looks at the evolution of banking agencies in Europe. Here are the main trends to remember from this study: • 12.6% of French bank branches could close by the end of 2020 According to Sia Partners, the number of agencies in France will increase from 37,261 to 32,500 between 2016 and 2020, or 12.6% closures. The rate of closures of agencies would be multiplied by four compared to the period 2012-2016, during which “only” 3% of French agencies had closed (while at the same time, the closures were respectively 24%, 12% and 11% of Spanish, German and Italian agencies). The period when France was spared seems to be over and a catch-up phenomenon is currently at work. This is due to the digitization of the sector, which is characterized by a drop in agency visits: less than 20% of clients visit an agency more than once a month, according to Sia Partners. The study also cites the decline in the profitability of the agencies as well as the decrease of the subscription of products in agency. “Between 80 and 90% of subscriptions are today in an agency. It will be 50% after 2020 and the trend will accelerate, “says Figaro Damien Schmitt, senior manager at Sia Partners. • Which groups would close the most agencies? According to estimates provided by the banks – and quoted by Sia Partners – the LCL group would close 14% of its branches in France between 2016 and 2020, Societe Generale and BNP Paribas would close 10% while the Caisse d ‘ Epargne and the Banque Populaire group would close 5%. Île-de-France – which has 698 Societe Generale establishments, 632 BNP Paribas facilities and 608 LCL facilities – will be particularly affected, as the groups with the largest presence are those that will close the most branches. • France remains well off at the European level Despite planned agency closures, France is doing better than its European neighbors. The number of agencies for one million inhabitants is thus twice the European average. With Spain, France has the largest number of agencies per capita. “The Scandinavian countries, the United Kingdom and the Netherlands are characterized by very low rates in connection with their work of bank digitization,” says the study. Another reason for satisfaction: the physical agency is still “a necessity”, according to Sia Partners. This is particularly the case for complex products to subscribe or purchase decisions that make human contact unavoidable. The study also quotes figures explaining that 79% of French people find their adviser competent, that 55% of French people say they prefer to have an advisor and finally less than 15% of French are interested in a bank “100% Internet”. “It’s a French tradition, the French remain attached to their advisor,” confirms Damien Schmitt. Proof that adherence to the “all digital” is not yet a reality. • What will the “future” agency look like? The study of Sia Partners finally sketches the face of the banking agency of the future in a digitized universe. “The traditional agency model is out of breath for the benefit of specialized agencies (…) The agency must now develop tailored solutions with high added value, oriented towards a renewal of the customer experience, joining proximity and friendliness “Explains the firm. For Sia Partners, the agency of tomorrow will have to be “modern (digital), convivial (place of sharing), practical (intuitive) and flexible (open at midday or evening after 18H, the weekend, half a day in week). “The goal is to restructure its network with a commercial presence of expertise, with very specialized consultants available even remotely,” concludes Damien Schmitt.

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