Bank branches are dying out: Deutsche Bank plans to cut employees and close branches

Bank branches are dying out: Deutsche Bank plans to cut employees and close branches

According to a report by www.n-tv.de,

Postbank customers are annoyed by poor payment transactions and service. The parent company Deutsche Bank still wants to reduce the number of employees at the subsidiary and close branches. For months, Postbank customers have been complaining about problems such as standing orders not being executed and poor service. The consumer advice centers have recorded numerous complaints that have arisen due to the conversion of IT systems. Despite these problems, Deutsche Bank plans to close half of all Postbank branches, which consumer advocates describe as a “blatant mockery”.

The total number of bank branches in Germany has been falling continuously for years. In 2022 there was a decrease of 1266 branches for a total of 20,446. This trend is due to increasing online and mobile banking, which means fewer and fewer customers are physically coming to branches. Banks are responding to this trend by reducing staff and rent costs, which is supported by the increasing online rate of customers. According to a survey by The Economist, 65 percent of bank managers believe the branch model will be “dead” by 2026.

The shrinking process affects all banking sectors, as the Bundesbank reports. The major banks cut almost eight percent of their branches last year, while the savings banks and cooperative banks also closed numerous branches. Overall, the number of credit institutions in Germany has fallen, particularly due to mergers of cooperative institutions.

The impact of this branch death on the market is far-reaching as banks reduce costs and focus more on online services. This requires an adjustment in consumer behavior, especially among older customers who are less internet savvy. Banks must ensure they continue to meet the needs of this customer group while optimizing their operational costs.

The evolution of banking towards a more digital and efficient model reflects changes across the financial sector. This transformation will create challenges for both providers and consumers as the industry adapts to new market conditions and customer expectations.