The War on Financial Exclusion

Bell on the line a collection of signatures with an eloquent title I’m older, I’m not an idiotpromoted by a pensioner from Valencia at the end of 2021, was the fuse that put on the political agenda what for some time represented a problem for a significant part of the population: the risk of financial exclusion, either due to age or place of residence, as happens in rural areas. The fact is that the population, which is aging, scattered and far from the cities — empty Spain — is the most vulnerable and the one that has faced the most obstacles in accessing its financial institutions in recent years.

Because since the crisis of 2008, banks have been forced to concentrate in order to reduce costs and maintain margins suffocated by interest rates ultra low For almost a decade, banks continued to reduce the number of employees and close offices. It should be noted that European Central Bank (ECB) did not reverse its monetary policy until last summer, forced by the need to cool rampant inflation as a result of the turmoil caused by Russia’s invasion of Ukraine.

Network adaptation and digitization

Added to the aforementioned (concentration and negative rates) is the mandate to renew or die, because the unstoppable digitalization process is accelerating the change in the banking business model, in which the traditional one is based on branches and face-to-face. – facial care- it is displaced by electronic operations. The problem arises when, as happens with the elderly, adaptation to digital banking is difficult or downright impossible. If we add to this the closing of offices or the limitation of customer service for the simplest and most common procedures — from cash to paying bills — life becomes complicated for those who do not handle new technologies.

That the problem is not negligible for that segment of the most vulnerable population, which is exposed to the greatest risk of financial exclusion, became clear when society as a whole expressed its dissatisfaction. It eventually caused a chain reaction, put the issue on the agenda of the governmentwhich put pressure on the sector, sensitive to the consequences of its constant crisis of reputation.

With this, the bank made a written commitment to pay particular attention to the most vulnerable groups and offer a service appropriate to the needs of clients, regardless of their age, level of digital competence, income or place of residence. In other words, a year ago it was time to stop and reverse financial exclusion.

Extending working hours, face-to-face attention and staffing or installing ATMs are some of the main measures adopted. Because, according to the report from Galician Competition Commission, since the end of December last year, and in which he deals with the process of bank concentration in the last six years (from 2017 to 2022), both in the social community and in the whole country, the situation is worrying, which is why he calls on the Executive to take measures.

50% of municipalities, without a bank

The document concludes that out of 8,131 municipalities in Spain, practically half, 4,007 of them, have neither a bank branch nor an ATM. And not only that, since 3,230 is also missing mobile banking service (passenger buses that serve the population on certain days), there is no mailwhich supplies entities that facilitate cash or bill payment.

At the end of 2022, according to data from the Bank of Spain, there were 17,945 bank branches in the country, of which slightly more than a thousand (1,022 to be exact) in Galicia: 409 in the province of A Coruña, another 309 in the province of Pontevedra, 165 in Lugo and 139 in Ourense .

I report of the Galician Commission for Market Competition i periodic statistics of the Bank of Spain They focus on the fact that the reduction of branch offices is not a thing of the past, the financial crisis of 2008 (that year the branch network broke a record), but continues, driven by the optimization of margins and digitization. An example is that from December 2007 to June 2022, 27,061 branches were closed in Spain, which means that 60% of those that existed disappeared in fifteen years, more than a third of them (10,618 branches). and almost 2,800 (13.43%) between June 2021 and June 2022.

Seven closures a month in Galicia

Galicia repeats the trend, because at the end of last year there were 1,022 branches, almost 600 less than in 2015. Namely, in the last seven years, the closing rate was seven per month.

Now the Administration, both central and regional, is promoting measures to restore the financial services that the rural population has lost, something that affects different territories unequally, since the number of closures is more concentrated in the largest (with more than 10,000 inhabitants), as shown in the Bank’s study of Spain (see chart accompanying this data), on the availability of face-to-face banking services in the country. In particular, Castilla y León, Aragón or Castilla-La Mancha, all internal communities, are the municipalities where it is most difficult to personally access a bank branch.

Banks must pay attention face-to-face two days a week in vacant Spain

In the process of restoring the banking services that have been lost, especially in depopulated Spain, the PSOE and Unidas Podemos introduced a joint amendment to the draft Law on the Authority for Financial Clients so that in municipalities with less than 5,000 inhabitants, banks guarantee face-to-face service. Namely, they will be required to do this at least two working days a week, with a minimum of six hours of customer service.

In this way, the Executive Power adopts measures to increase the banks’ attention to the most vulnerable; that is, both older than 65 years as well as those who reside in small and scattered municipalities.

Privileged care for the elderly

In an amendment introduced in the parliamentary process of the norm, the government partners also proposed the provision of preferential care systems for the elderly in bank branches during at least three hours a day. To achieve this, each customer service office will have an on-site person who will take on the position of “elderly manager”, with specific functions to help this group, something the sector has already implemented, as part of voluntary measures. In the same situation is the launch of a personalized telephone service, without additional costs, which works all the time, aimed at the group of elderly people.

The Association of Sector Employers maintains that all entities have doubled the hours of attention to citizens with an emphasis on the elderly, a service that in the first months it served more than six million peopleto which should be added the attention provided via the telephone line.