From 2020 and until last year, the territory has seen its total office park go from 397 to 336, a phenomenon that has intensified with Covid
If you live in Abaltzisketa, Orexa, Elgeta or Baliarrain, you will have to travel to a neighboring town to carry out any banking operation as there is no branch in your area. They are only four of the more than 30 Gipuzkoan municipalities that lack a bank branch in their streets. Of the 88 towns in Gipuzkoa, 34, almost four out of ten, have not had a branch for years (38.6%), according to the statistical report ‘Geographical distribution of branches by entity’ by the Bank of Spain.
It is the map of victims left by the drastic cost-cutting plan that the Spanish banking system as a whole has undertaken in recent years, and which has intensified since the pandemic began. Efforts have been made to compensate for the sector’s profitability problems with cutbacks that have fundamentally affected the workforce and branch networks. Although the closures have been focused on large municipalities, rural areas have not been spared. From 2020 and until last year, Gipuzkoa has seen its total park of bank branches go from 397 to 336, which represents a cut of 15.3%. If we put the magnifying glass in the Basque Country, the number of offices that have been closed since the Covid year amounts to 142, going from 1,146 branches to 1,004 in 2021.
The question is how fast this trend is advancing and what factors are undermining the disappearance of bank branches. Everything seems to point to Covid being one of the main causes, but not the only one. And it is that as a result of the health crisis, a large number of entities have chosen to strengthen their online payment tools to facilitate purchases by their customers.
But the rise of digital payment methods is not the only cause of the gradual disappearance of branches. The last two major economic crises –especially the debt crisis, which began in 2008 with the fall of Lehman Brothers–, the transformation (in part forced by Brussels in the framework of the bailout of Spain) of the financial sector and the prevailing and unstoppable digitization of the business – now raised to the nth degree by the pandemic – have completely transformed the banking map in the State and in Gipuzkoa.
Kutxabank, with 84 branches in the territory and a presence in 54 municipalities in Gipuzkoa, ‘brags’ of being the financial institution that “guarantees” access to street banking in the territory by offering service to the 13 towns in which there is only one office. Also, the bank chaired by Gregorio Villalabeitia, has another 14 locations in which, despite not having a branch, it does have ATMs. “If we add branches and ATMs, we are present in 68 municipalities of Gipuzkoa, occupying 77% of the territory map”. In addition, in those municipalities with fewer than 2,500 inhabitants, Kutxabank reaches 83% of those towns with its branches.
With the current network of branches, the ‘K’ bank seeks to respond to the service and business needs of its customers, although it maintains that “processes of streamlining branches may take place to integrate them into larger spaces”. And it is that the financial institutions are now looking for a format of larger branches where the services offered by the smaller branches are integrated. “Thus we offer a more complete and higher quality service.”
‘I’m older, not an idiot’
It was only two months ago when the ‘rebellion’ of the elders forced the banks to change their attention and facilitate the procedures in the face of the unstoppable advance of digitization and the closure of branches. This newspaper contacted different citizens of the territory to bring to light the problems that these people encountered when carrying out any type of management. A Bidebieta neighbor claimed that he had to travel “more than a kilometer” to go to the San Pedro or Larratxo office after Kutxabank closed its office in that San Sebastian neighborhood more than two years ago.
In Berrobi, one of the 34 municipalities in the territory that does not have a branch, the City Council left a place where it was planned to give it to a bank for free. “It’s still there, empty,” lamented a resident of that municipality.
From Kutxabank they seek to differentiate face-to-face from personal attention. That is why it has already incorporated more than 60 professionals to reinforce this service. Thus, in the last five years it has hired more than 350 professionals on an indefinite basis in a broad process of attracting talent. The workforce exceeds 5,500 people. «When we talk about personal attention, we offer a manager who advises, accompanies and responds to the financial needs of our clients. That is our bet. That is why we have expanded the personal attention service through personal banking».
The second concept, that of attendance, is centered on the ‘CONtak’ service. This is personalized attention for a fully digital customer profile. “With our size, we are the financial institution with the largest number of personal managers and with the largest digital clients in the Basque Country.” Thus, Kutxabank’s remote personal attention will be extended to one million users.
For its part, Laboral Kutxa, with 63 bank offices in the territory and 173 in Euskadi, maintains that “our presence in a municipality that already has one or more branches is not going to disappear. That is our commitment. Yes, there may be situations of readjustment or restructuring of offices in different towns, so that it goes from two offices to one, but in no case will that number remain at zero.
Although the main service channel of the financial entity that belongs to the Mondragon Group continues to be the branch, it has to “respond to the new ways of relating to customers”, who increasingly carry out the simplest operations and queries to distance, while from the branches “the needs that require a higher level of advice are met, which in turn can be attended by our managers in the branch itself or remotely”.
In a decade, 50% less
The map of bank branches in the State has also been considerably reduced over time. In the last decade, the number of bank branches has decreased by nearly 50% and the total number of ATMs has been reduced by 20%, which has caused that around 1.3 million people find themselves in a difficult situation to obtain physical money or carry out any query or operation in an office.
The Spanish Banking Association (AEB) and the Banking Association (CECA) insist on replacing the closure of branches with maintaining face-to-face contact through measures such as ofibuses, which several financial entities already have deployed; or the cash withdrawal service in certain businesses (‘cash back’). It is about “reaching all channels”, indicate sources in the sector.
Jon Zubizarreta | Mayor of Abaltzisketa
“We are approaching Alegia or Amezketa”
«As far as I remember, Abaltzisketa has never had a bank branch or an ATM and we have never had any complaints from our neighbors. It is one thing to have an office and then close it over time, and quite another to never have had one. We have adapted to this circumstance and when we have needed to carry out any management we have approached Zaldibia, Amezketa or Alegia. We have sometimes asked for an ATM, but in the end it could not be and there is no short-term forecast that we are going to install one. I think that in a town of 300 inhabitants it doesn’t make much sense to have an office, nor does a clothing store or a shoe store. I doubt we would use it every day.”
Olatz Pawn | Mayor of Toulouse
“We must not neglect face-to-face”
“Before closing the last branch in the area last year, Kutxabank managers contacted the City Council to explain the reason for the closure and its planning. We are in a time of transition. The digital age has many positive things, but also many dangers, such as closing the doors to people who are not yet able to adapt to new technologies. Telematic attention is a reality, but we cannot leave aside the face-to-face. The last branch in Tolosa closed in 2021. In our municipality, what worries us most is the Tolosaldea region and those more rural municipalities that have been able to have an ATM and have been able to close.”
Jose Antonio Santano | Mayor of Irun and Vpte. Eudel
“It is a worrying phenomenon in Irun”
«From Eudel we met with the management of Kutxabank to discuss this phenomenon and express our concern about the digital divide, although that does not mean that they have not closed ATMs. In Irun we have achieved clear commitments to avoid the closure of different ATMs. In neighborhoods such as Larreaundi and Anaka (where there have been closures of ATMs and offices) we have launched training courses for the elderly on a Kutxabank app focused on digital banking. You can clearly see this trend of closing offices in the territory and also in Irun. The number of branches has plummeted over the last ten or fifteen years. It is a phenomenon that generates enormous concern in our neighbors.
75% of companies believe that cash will disappear
Three out of four companies consider that the cashless society will be a reality in less than ten years. According to the latest European Payments Report, 75% of Spanish entities believe that, in a maximum of ten years, there will be a market where physical money hardly has a presence. Specifically, 5% believe that this will happen in the next two years, 12% in five years and 58% in ten years. The remaining 25% predict that later or never. Also, half of the companies surveyed believe that small businesses would have a hard time surviving if this reality hits.
Covid is a threat to cash. Of that there is no doubt. The data collected during the pandemic by the European Central Bank (ECB) is revealing. 40% of all respondents said they now use contactless payment cards more frequently, while 40% also said they use cash much less frequently or somewhat less. Almost 90% of all these people who use less cash now will continue to do so when the coronavirus crisis is over.