As many as 40,000 bank branches will close across Europe in the next three years, as increasing numbers of customers turn to digital channels, according to a study by consultancy Kearney.
With the Covid-19 pandemic driving uptake of digital banking, Kearney expects that one in four European bank branches will pull up the shutters, with call centres taking up the slack for customer services.
Those branches that survive will morph into a new role as advisory outlets for more complex financial services and as hybrid hubs for remote working by head office staff, the consulting firm believes.
Kearney likewise predicts that 70% of account openings, deposits, consumer loans, and credit card applications will happen remotely over the next three years, with end-to-end digital capabilities a must-have for banks adapting to changing customer behaviour.
The consultancy says banks will need to audit their customer journeys and prioritise investment spend to improve digital interactions.
"For those customer processes that have been rapidly digitized in the early days of the pandemic, these now need to be stress-tested and improved as required to ensure long-term operational resilience," says Kearney. "The same goes for any digital processes that were already in place, which also need to be stress-tested for a more integrated and digital banking era. It’s a win-win situation — digital banking is not only better for the customer, but cheaper for the bank."