About the closure of Bank Branches

Because of current economic difficulties, banks seek to reduce costs and transform their business models appropriately. One of the means used to deal with this movement is to close small branches and focus on digital experiences.

The tendency to reduce the physical presence began early. Nearly 5% of US bank branches (over 4800) were closed between 2009 and 2014. Apart from the transformation of the banking sector, the closure of small branches has raised concerns in some areas of the country that became ” banking deserts. ” The phenomenon could have led to a scarcity of access to credit, reducing the necessary information to borrowers.

Meanwhile, online banking has grown and the cost of provided services has increased due to stricter banking regulations. It is observed that the number of SME loans decreases as the distance between them and the bank increases. The proximity and the provision of information facilitate trust, somehow.

Technology is advancing rapidly and the activity of online loans is considered the next service segment to consider. The ATMs located in rural areas have their history and traditions. Rural banking branches play a huge role in promoting financial inclusion and access to credit for low-income customers and disadvantaged neighborhoods. This is an important point to consider before launching a general savings plan in a banking network. See also http://letstalkpayments.com/

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