Research from Deutsche Bank suggests that the more branches that banks close the sharper the fall in footprint at remaining outlets, as consumers turn to online services in frustration at the time spent traveling to a bricks and mortar location.
Within Germany, the number of bank branches has declined sharply from around 40,000 in 2007 to some 28,000 in 2018.
Deutsche Bank has drawn from a proprietary dataset on the share of clients who visit their local branch for an appointment at least once per year, to search for meaningful regional differences in customer behaviour.
The bank found that proximity to the nearest bank branch may explain why Germans visit branches at a lower frequency in remote, less populated areas. In the East, customers on average need to travel 13 km to the next bank branch compared to nine km in the West. As a result just 25% of clients in the East ever set foot in a bank, compared to 40% in the West.
Interestingly, however, in the largest cities such as Berlin, Hamburg, Munich or Frankfurt, where distance is not such an issue, clients visit branches less often, probably due to a younger and hence more tech-savvy population.
"While greater distance tends to dampen bank branch visits, it probably increases the use of online alternatives in Germany," the research concludes. "This also opens up the possibility of a vicious circle of branch closures leading to fewer visits which again lead to more branch closures."