Shoppers rethink purchases after discovering price hikes, product upgrades - Reduction of bank branches in Lower Saxony.
The amount of banks' physical locations in Lower Saxony is reducing. As reported by the Lower Saxony Savings Bank Association, the start of this year showcased a total of 628 bank outlets with active staff members throughout the region. Contrast that with five years ago, when there were around 160 more of these outlets. Consumers are simply dealing with banking affairs on online platforms instead of going to the branches. "The need for digitalization services is continuously rising," affirmed Michael Schier from the Lower Saxony Savings Bank Association. The network of banks is adapting to this shift in consumer behavior.
Similar changes are happening to cooperative banks. Come 2018, the 37 cooperative banks under the Cooperative Association in Lower Saxony and Bremen managed 641 locations having active employees, as stated by the association. Rewind back to the end of the year prior, and there were still 437: nearly a third less. "Thanks to Corona, consumers are turning to the online channels at an unexpected faster rate," disclosed Volker Hetterich from the Cooperative Association. Simple banking tasks such as transfers can now be done through apps or personal computers.
Nonetheless, some tasks call for face-to-face discussions. "It's clear that customers are increasingly resorting to branches when it comes to matters requiring personal advice," noted Schier. As an example, he highlighted wealth management or real estate financing.
For the banks falling under the Cooperative Association, the trend is towards specialized advisory teams in central locations. According to Hetterich, this also means a shift towards larger branches. These outlets offer more advanced tools for advice and support. "The percentage of branches with at least six employees is growing constantly and is now almost 40%," mentioned Hetterich. "Compared to that, smaller branches with less than five employees are becoming less significant."
The closure of bank branches isn't unique to northern Germany. The Bundesbank updated that there were fewer than 20,000 bank branches all over Germany this year. In total, the banks and savings banks had 19,501 branches with employees at the end of the year. That's 945 or 4.6% less than in 2021.
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Despite the reduction of bank branches in Hanover and Lower Saxony, some consumers still prefer face-to-face discussions for complex banking matters like wealth management and real estate financing. The Savings Banks Association in Hanover reported a decrease in physical bank outlets over the years, with 628 active branches in 2022, compared to 788 in 2017. Similarly, cooperative banks under the Cooperative Association in Lower Saxony and Bremen saw a decrease in branches, from 641 in 2018 to 437 at the end of 2017. This trend of bank branch closure is not limited to northern Germany; the Bundesbank reported a decrease of 4.6% in the total number of bank branches throughout Germany in 2022.
