Challenger banks had already started a revolution in digital banking, but with the coronavirus pushing these changes to become permanent it could mean that one in four European bank branches will be forced to close by 2023.
That’s according to new research from global consultancy partnership Kearney that predicted that 25% of bank branches will close across Europe in the next three years, representing a sharp increase in the ongoing trend of bank branch closures across Europe, which saw 35% branch closures in the last ten years.
The study also estimated that the growth of online banking will only continue to skyrocket as a result of these closures, with 70% of all European account openings, deposits, consumer loans and credit card applications happening digitally within the next three years.
Prior to the COVID-19 outbreak, Kearney’s research showed that 53% of European banking customers reported not using in-branch or other physical channels to research and buy new products.
The study also showed that the UK, Norway and Sweden were the most digitally savvy nations when it came to banking, with 70% customers already using remote channels like online banking, mobile apps and call centres to research and purchase products.
“If there were ever a time to invest in providing a seamless customer journey across digital and offline channels, it’s now,” argued Simon Kent, partner and global head of financial services at Kearney. “The COVID-19 pandemic was the catalyst needed for many changes already underway in the banking industry and has significantly accelerated demand for these changes to happen quickly. Customers won’t go back to how things were, so neither should banks.
“This is a great opportunity for banks to stress-test their customer processes – both online and offline and especially how they interact with each other – to ensure long-term operational resilience. Those that don’t will miss the opportunity to continue the momentum created by customers’ new digital habits, structurally change their cost base and dramatically improve customer experience.”
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