From 2026, large banks will be required to ensure presence in the regions /

by times news cr

Taking into account that in ⁢the ‌last 10‍ years, the number of face-to-face customer service points of banks in Latvia has decreased the fastest among the eurozone countries, the aim of this initiative is to maintain a⁣ balance between the digitalization of financial services​ and face-to-face support for those Latvian residents and entrepreneurs​ in ​regions that still need⁣ face-to-face services, but the distance to the place of service provision is too large, so ‍their availability is difficult, according‍ to‌ the central bank.

The President ⁢of the ⁤Bank ⁣of Latvia, Mārtiņš Kazāks, explains that this decision will ensure better access to financial services in the regions.

Kazaks emphasizes that this is very important, because banks have digitalized ⁢faster than citizens and companies, creating a‌ gap between banks and their customers. With this⁤ decision, the⁢ Bank of ⁣Latvia​ corrects it, because good access to financial services is‍ one‍ of the cornerstones of economic growth.

The Bank of Latvia informs that at the end of 2013, banks in Latvia ​had‌ 319 customer service points, while in October 2024 – 69.

Also, the central bank notes ‌that ‍a significant ‍part of Latvian residents and ⁤businessmen are not satisfied with⁣ the availability of face-to-face services and consultations. Digitization ‌requires ⁢standardized solutions,⁤ which in many cases are not suitable ‍for citizens and entrepreneurs.

According to the data of the‌ survey of Latvian‌ companies conducted by the market research company “Rait”⁤ in the⁤ summer of 2024,⁣ on​ the‌ order of the Bank of Latvia, 28% of entrepreneurs believe that banks work in a standardized and bureaucratic manner, without taking into account ⁣the specific needs of companies.​ At the same time, 12% of entrepreneurs state that the lack ⁢of branches and face-to-face consultations ‌reduces the possibility of creating mutually beneficial cooperation, ‍while 34% of residents are ‍not satisfied with the availability​ of branches.

The changes initiated by the Bank of ‌Latvia will promote the provision of financial services in a⁤ form that will ⁤promote the ​financial inclusion of all groups ‍of society and the availability⁢ of financial services. ⁤The new requirements envisage establishing⁣ requirements⁤ for banks⁣ to provide face-to-face services.

This regulation will apply to those banks whose‌ activities are oriented towards ​providing a wide range of services to⁢ the public ‌and which are‌ also​ planned to be designated as responsible for the provision ​of ATM infrastructure. In ‌the current market situation, they are the four ⁢largest ‌credit institutions in​ Latvia, namely “Swedbank”, “SEB ‌banka”,⁢ banka ⁤”Citadele” and the Latvian branch of ⁣”Luminor⁢ Bank”.

The ‍regulations of the Bank of Latvia⁤ stipulate that face-to-face services ⁤must be permanently provided in the ​centers of national cities and the largest⁣ regions (with at least 25,000 inhabitants), if the ⁢specific‌ bank has at least ​20% of customers ‌from the population of the national city or region, and ‍there is no‍ permanent⁢ customer service location⁢ within the nearest 40 kilometers.

In‌ the centers of other counties, banks must ensure a presence, but not ‌a completely permanent customer ‍service point, where customers must be served⁢ at​ their request.

The Bank ‌of Latvia believes that the presence⁢ of‌ credit institutions ​in⁤ the⁢ regions is ensured flexibly and rationally, so credit institutions have the opportunity to request the application of ⁢exceptions if,⁤ for example, they prove that the majority of​ customers in⁢ the given region are digitally active.

It is also planned to regularly review the‍ rules and their practical application, ‍clarifying the criteria and conditions if necessary.​ Banks will have the freedom of choice regarding ‌the most appropriate way⁣ of organizing service provision, therefore it​ is predicted that their ability to ‌form successful cooperation with local governments could also be of⁢ significant practical importance, ‌notes the Bank of Latvia.

On Friday, November ⁢29, representatives of the Bank of ​Latvia will meet with the Latvian Association of Local Governments to ‍explain the purpose and nature of these regulations to local governments.

Latvijas Banka emphasizes⁣ that there will be no return to the past, when a branch⁤ of a bank operated five days a week in every small town. Many citizens use⁤ financial services digitally ‍and ⁣will not change their habits, so it is necessary to ‌look for rational and flexible solutions that⁤ are designed specifically for today’s ⁢situation and have​ reasonable and justified costs.

The Bank of Latvia will collect⁤ and​ publish information on the banks’ regional presence on its website.

Banks will have to meet⁢ the⁤ requirements contained in the regulations ⁤from January 1, 2026.

How can ​banks effectively balance digitalization with personalized ‍customer service to‍ meet the needs of all consumers?

Interview between ‍Time.news Editor and Banking‌ Expert

Editor: Welcome to Time.news, and thank you⁢ for joining us today.‍ We’re diving into‍ an ⁣important shift‌ happening in Latvia’s banking landscape.⁤ With a rapid decrease⁣ in face-to-face customer service points in the last ten years, the Bank of Latvia is stepping in to address this gap. Joining us is ⁤ Dr. Laura Rudzıte, a ​banking and finance expert. Laura, thank you for being here!

Laura: Thank you for having me! It’s​ a pleasure to discuss such a critical topic.

Editor: Let’s get straight to ‌it. The ⁤data indicates ‍that the⁢ number of customer service points in Latvia‌ has plummeted from 319 in 2013 to ⁢just ⁤69 by October 2024. As​ an expert,‌ how significant is this decline for consumers, especially in rural areas?

Laura: ​It’s a huge concern. This decline has created a digital divide; many residents, particularly in remote areas, are ⁣left without adequate banking services. Digitalization is essential, ​but it shouldn’t come at the cost of accessibility. The lack of face-to-face interaction can⁢ hinder customer ⁣service and support, especially for those who​ may not ‍be tech-savvy.

Editor: Absolutely. The‌ President of the Bank of Latvia, Mārtiņš Kazāks, ‍mentioned that this decision to⁤ stabilize ​financial ⁣service ‌access is essential for economic ⁢growth. Why do⁣ you think face-to-face banking‍ is still crucial for​ a segment of the population?

Laura: First and foremost, ⁣trust. Many people feel more comfortable discussing their financial matters in ​person. It builds trust between the bank ⁢and the customer. Moreover, certain financial products and services often require detailed explanations or personalized advice, which is challenging to convey through a screen. Kazāks is right; we need to close this gap ​for the⁢ sustained‌ economic development of society.

Editor: The survey ⁣by⁢ Rait revealed that a significant ⁢portion of entrepreneurs feel banks operate in a standardized, bureaucratic manner, ‌without fully accommodating specific needs. How can banks balance their digital strategies with ‌personalized customer service?

Laura: It’s about finding⁤ that sweet spot between ​efficiency and personal touch. Banks can utilize ‍customer data to inform ​their digital platforms while simultaneously investing in training staff‍ at their physical ‍locations.⁣ They can create hybrid models where routine⁣ transactions can⁤ be handled online, ⁢but complex queries can still be addressed face-to-face.

Editor: The new​ regulations by the Bank of Latvia require face-to-face services in certain regional centers. What⁢ do you see as ⁤the‌ potential challenges ⁣and benefits of this move?

Laura: One challenge will be⁤ ensuring that banks adhere ​to these requirements consistently. ‍It could also stretch‌ their resources thin, particularly in regions with smaller populations. However, the benefits are ⁤significant. This initiative can enhance‍ financial⁣ inclusion, ‍allowing all residents—especially those in underserved regions—better access ⁤to banking services. It promotes local economic ⁣growth by ensuring that all groups can interact with financial institutions effectively.

Editor: ⁤ That makes sense. Additionally, ‍you ⁣mentioned that‍ banks could ⁢request exceptions​ if their customer base is predominantly ⁣digitally active. Do you believe this stipulation might undermine the intended goals of these regulations?

Laura: It could potentially create loopholes.⁤ If banks misuse that provision to limit​ face-to-face interactions, it could harm those who genuinely need in-person help.‌ Regular monitoring⁢ and transparent criteria for granting exceptions will be critical in making sure the regulations fulfill their intended purpose.

Editor: what would you recommend‌ for the residents and entrepreneurs who feel the pinch of this evolving ‍banking environment?

Laura: I⁢ think it’s crucial for ‌them to voice their challenges directly to their ⁢banks.⁢ Engaging in dialogue can provide valuable feedback to institutions. Additionally, they should leverage any local services available, and‌ perhaps advocate for community-based banking solutions that​ prioritize‍ accessibility.

Editor: Thank you so much, Dr. Rudzīte, for your ⁤insights on ⁤this vital‍ matter. It’s clear that⁤ while digitalization is essential, so is ⁢maintaining the human element in banking.

Laura: Thank you! It’s been great discussing this⁣ topic, and I hope for positive‍ developments for all Latvians in the future.

Editor: And thank you to our‍ audience for tuning in. Let’s continue to ‍monitor these developments closely. Until next time!

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