The closure of bank branches is accelerating in France, due to a drop in attendance and the rise of online services. Between 2020 and 2023, more than 2,000 agencies have already closed their doors.
Faced with this situation, traditional banks must rethink their model to remain competitive. However, what future awaits these establishments in an increasingly digitalized world? Let’s explore the issues and solutions for the future of bank branches.
The closure of bank branches: an inevitable trend
For several years, the closure of bank branches intensifies. In France, between 8% and 20% of agencies could close by 2027, or between 2,700 and 6,700 points of sale. This phenomenon is not isolated: in Europe, the reduction in the number of agencies is widespread. Thus, Spain saw around 20% of its agencies close between 2020 and 2023. Several factors explain this trend:
- the digitalization of banking services;
- increased competition from online banks which weakens the traditional model;
- and the drop in attendance which pushes banks to review their strategy to reduce their costs.
To better understand this development and its impacts on the traditional banking sector, this detailed opinion will allow you to explore a complete comparison of traditional banks and online banks facing these new challenges.
The phygital model: a response to the transformation of the sector
Faced with this situation, a new model is emerging: le phygitalwhich combines the best of physical and digital. This concept allows banks to maintain a physical presence. The objective is simple: transform agencies into connected spaces where customers can carry out their daily operations on machines while benefiting from personalized advice if necessary.
Some banks have already adopted this model successfully. For example, MillenniumBCP in Portugal has redesigned its agencies by introducing automated self-service machines and equipping its advisors with tablets to better meet customer expectations. This transformation does not mean the end of human contact! On the contrary, it allows advisors to focus on high value-added interactions while delegating simple operations to machines.
In France too, several banks are following this path. Crédit Agricole or BNP Paribas are investing in modernizing their points of sale to offer an omnichannel experience to their customers. However, the transition to phygital requires significant investments and gradual adaptation to meet varied consumer expectations.
Challenges linked to the closure of agencies
Although the phygital model seems to be a promising solution, it does not solve all the problems associated with branch closures. Indeed, certain populations remain attached to human contact and still experience difficulty using digital tools.
Moreover, the closure of agencies poses an accessibility problem in rural areas where banking services are becoming scarce. In these territories, withdrawing cash or accessing an advisor becomes a real challenge for some residents. In addition, vending machines are also disappearing with the closure of physical points of sale. This creates a gap between well-served urban areas and the countryside.
To overcome these difficulties, some banks are experimenting with solutions such as videoconferencing or shared reception in certain shopping centers in order to maintain a link with their geographically distant customers. Unfortunately, these initiatives remain limited and are not always enough to fill the gap created by the physical closure of agencies.
The future of traditional banks: towards sustainable transformation
The future of traditional banks rests on their ability to adapt to new market expectations. If all digital seems to be the direction favored by certain players in the banking sector, many still wish to be able to count on a human advisoreven among younger generations.
Banks must therefore find a balance between digitalization and humanization of the service. This involves a profound reorganization of their agency networks in order to offer a personalized service. The phygital model appears to be a viable short-term solution. However, it will have to continue to evolve to meet the specific needs of each clientele.
