Nearly 600 bank branches are gone in ten years!

This has caused concern, especially among older customers: Credit Suisse (CS) recently announced that it will close 14 bank branches by February 2023. Other banks are also considering closing branches, according to Blick’s survey of Switzerland’s 20 largest financial institutions.

For years, the Swiss have been increasingly using online and mobile offers for banking transactions and visiting bank branches less and less. Looking back over the last decade, the bare numbers look distasteful: at the beginning of 2012, the surveyed banks still had 2,384 branches in Switzerland, compared to 1,799 at the beginning of 2022. about 25 percent!

And as the last example of Credit Suisse shows, this decline seems to have no end in sight. The big bank is not alone. Bank Valiant will open five more branches in 2022 and three more in 2023. However, as of the end of 2022, it will close its 23 branches close to each other as part of its profitability increase program.

This is the most mined place

The lion’s share of branch discounts over the last decade can be attributed primarily to large banks and Raiffeisenbank. In UBS the number of branches has fallen by about a third and in CS by almost half, including the integration of NAB (Neue Aargauer Bank). With 14 closures announced, this network has shrunk again. However, Credit Suisse argues that it is present in all regions of Switzerland with its “branch network tailored to customer demand”.

The remaining branches were to be developed “away from the box office and towards a modern meeting place”. At Bank Cler, formerly Bank Coop, there is a similar trend towards no-bench lounges with desk couches and coffee machines. Cler calls it the “bank branch of the future”.

The largest net reduction was in Raiffeisen, with 278 branches, or almost 25 percent less. According to Raiffeisen, the accessibility of the branches has not suffered as a result, with 90 percent of the Swiss population still getting to a Raiffeisen branch within ten minutes by car. Its geographic presence will remain high in the future. This while retaining the concept of the «consulting bank», where there is no need for a box office.

However, Raiffeisen attaches importance to the fact that the number of full-time positions in the group increases inversely with branch shrinkage: 8,167 people are employed at 1098 locations, while there are 9,729 people at 820 locations.

The development in Postfinance is also interesting: In 2007 there were still 28 branches, in 2012 there were 45 branches. Meanwhile, it has been restored to its original size.

Here it is even more

If you look at the cantonal banks, you will notice that there is very little reduction here. On the one hand, this has to do with a statutory performance mandate for cantonal banks. However, this does not prevent the shrinkage: In Zürcher Kantonalbank (ZKB), 45 percent of the branches, primarily small locations and agencies with limited service, were liquidated. Berner Kantonalbank also shrank by almost 30 percent; Up to 35 percent in Graubündner Kantonalbank. As a result, the cantons with the greatest geography and population declined. For most others, the reductions were more cosmetic in nature. In some cases, even the total number of employees in branches has increased.

The wide presence in the respective canton remains an important distinguishing feature. For example, Schwyzer Kantonalbank explains: “Our canton-wide presence is a significant advantage that our competitors are maintaining less and less.”

Migros Bank, on the other hand, grows with the cooperation it has made with the post office, using post offices to open regions that its own branches have not opened before. In addition, the opening of its own branches can be considered.

No overseas service at bank branches

This leads to the question of why banks still need branches. Some branches of many banks have been converted into ATM locations. As a result, the cash business remained regionally stable with no staff required. Branches with staff are often only required for consulting services. It deals with topics such as mortgages, pensions, inheritance or financial planning. Payment transactions, on the other hand, almost never take place physically.

The remaining payout banks will pimp for it. For example, ZKB has been testing “new interaction options” at the Zurich-Stettbach train station since March 2021 and a concept branch opened in Winterthur in June 2022. Credit Suisse and various cantonal banks have also launched new branch concepts. Many banks have also expanded their customer contact options: video advice or other online direct channels are offered, as well as personal visits at home. There is also a lot of investment in the Thurgauer Kantonalbank, around 8 to 10 million francs per year, in a greater focus on advice.

Expansion of duties to non-banking services is not currently planned. In other words, banks are committed to their core business and the financial needs of their customers. Getting additional business with other services is not a problem, as is sometimes done at post offices or travel agencies.

The only question that remains is how far the dismantling will go. None of the surveyed banks wanted to commit themselves to a “minimal number” of bank branches.