France is an example of the opposite. It banks are very reluctant to contract their networks, having the most branches in Europe – 38,450 – by the end of 2012, with their physical presence having only shrunk by less than 3 percent since 2008.
“When you close a branch, you run the danger of losing at least a few clients,” says Fabrice Asvazadourian, global co-head of financial services at consultant Roland Berger. “It’s the moment that gives people an excuse to consider switching banks.”
But the general trend for diminishing the number of bank outlets remains, as maintaining them accounts for 60 percent of retail banking costs, according to Deutsche Bank analysis.
Internet banking is one of the rapidly developing low-cost options. But it could take a new generation to see it used to full potential. So far, online banking can hardly be a full-scale substitute for the closed outlets. Those are mostly in remote areas with either crippled internet access or residents not being skilled enough in using the latest technology.