For years, consumers and citizens have had to live with the fact that their bank branches of trust are gradually being closed. And the pace of branch closings has been increasing rapidly since 2018. According to Bundesbank statistics, the number of branches will decrease from 40,000 in 2007 to 20,000 branches by 2025. The bank customer doesn’t care whether the financial houses glossy talk about “merging” the branches, about “converting” or “integrating”. You have to live with the disadvantages. Where the eye-catchers on the advertising flyers of the banks should suggest customer proximity, progress and relief.

On the one hand, there are the achievements of smart phones, the Internet, digitization and artificial intelligence. This quantum leap-like advance ostensibly has advantages, and nothing but advantages. On the other hand, there is the reality, and it is not so progressive and sexy when the robot does the job, the cash is replaced by the check card when the village savings bank closes nationwide. The fact is, all changes are associated with fears and the question of how should it go on?

Volksbank to close branches in Ludwigsburg

Citizens in the Ludwigsburg district in Baden-Württemberg also asked themselves this question when the cooperative financial group Volksbanken Raiffeisenbanken Ludwigsburg closed 12 of its branches forever on January 1, 2020. Although the bank withdrawal from the area had been announced months in advance, there was great resentment among the population. Volksbanks and Raiffeisenbanks repeatedly emphasize their independence and that they see their greatest responsibility in a very special way, especially in regional economic life.

And again and again with the tireless reference to the absolute importance of personal contact with the customer and the people in the region.

Economically understandable, difficult for customers

The decision-makers of the customer-friendly financial group find it very unfortunate that their target group, which is close to their hearts, now has to go further ways to withdraw cash and carry out other banking transactions, but in the end unchangeable. Knowing well that their Volks- und Raiffeisenbanken close more branches than is the case in the Sparkasse sector, or at branches of foreign credit institutions. They are based on arguments that represent the social trend almost one to one.

These include:

  • Banking on your own computer
  • (Online banking)
  • decreasing customer traffic in the branches
  • branch or personnel costs too high
  • Impact of zero interest rate policy
  • More favorable conditions for e.g. Private company lockers

Current analyzes show that the sum of all the factors mentioned means that the traditional branch network no longer has a future, although the strategies of the various banks are very different. Banks such as the Volks- und Raiffeisenbanken, which have primarily written their customer acquisition about the location on their flags, are well aware of the risk of losing customers. Because there are more and more digital bank customers opening their accounts with direct or digital banks. Not even 13% of all Germans do their financial affairs exclusively in a bank branch. Falling trend!

Winning the offers of the Volks- und Raiffeisenbanken, train stations, grocery stores and discounters as branch partners or offering buses as mobile branches can only be a well-intentioned interim solution, the duration of which is not yet foreseeable today.

The number of Volksbanken and Raiffeisenbanken in Germany fell from over 5,000 to 873 from 1970 to the end of 2018.