US-based global consultancy firm Kearney has predicted that a quarter of retail bank branches in Europe will close in the next three years.
Kearney’s predicts that as many as 40,000 European bank branches will shutter as the current Covid-19 pandemic accelerates the adoption of digital banking channels.
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The company believes that these branches will be replaced with call centres for customer services.
The remaining 75% of the branches will turn into advisory outlets and hybrid hubs to address complex financial queries.
Moreover, 70% of account openings, deposits, consumer loans, and credit card applications will happen remotely over the next three years, the company said.
Kearney financial services partner and global head Simon Kent said: “The Covid-19 pandemic was the catalyst needed for many changes already underway in the banking industry and has significantly accelerated demand for these changes to happen quickly.
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By GlobalData“Customers won’t go back to how things were, so neither should banks. This is a great opportunity for banks to stress-test their customer processes – both online and offline and especially how they interact with each other – to ensure long-term operational resilience.”
In its annual European Retail Banking Radar report, Kearney claims that in the past 10 years nearly 35% of branches in Europe have already shuttered permanently.
The latest report is tracking 50 banks in Western Europe and 42 banks in Eastern Europe across 22 European markets.
Kearney points out that before Covid-19 pandemic, 53% of bank customers in Europe are using digital channels for their banking needs.
Now, 70% of customers in Sweden, Norway, and the UK are using online and mobile banking channels and call centres for information and banking services.
