Thousands of Brazilians over the last year received the same communication from their banks: the letter or email usually explained that the account would be transferred to a new unit, due to the closing of the original branch. The movement, increasingly common, is a reflection of the increase in digitization, which gained strength in the pandemic, and also the increase in pressure from fintechs. In this scenario, the large listed banks deactivated nearly 1.8 thousand branches in the 12 months closed in September.
During this period, Banco do Brasil and Bradesco led branch closures, with 765 and 762 points closed, respectively. Over these 12 months, the two institutions laid off a total of 14,700 workers. The movement of closures also took place at Santander and Itaú, but in a much lighter way: the two banks closed 139 and 112 branches in the period. Unlike what happened with the two rivals, the institutions hired employees in the period.
The trend of closing the doors of physical units is still going to continue. A study by the German consultancy Roland Berger pointed out that the country’s five large banks could reduce the number of their branches by no less than 30%. At some big banks, branch transactions have dropped 70% this year, while cellphone transactions have jumped more than 90%.
BUREAUCRACY. It was at one of these agencies that the Colombian David Vélez, founder of Nubank, entered when he arrived in Brazil, in 2012, to try to open a checking account. The revolving doors with metal detectors and armed security guards showed that the process of opening an account would be difficult and slow.
And so it was. Four months later and a series of documents delivered, Vélez opened his account and was convinced that there was room for this process to be easier, as he says in Nubank’s IPO documents, which should debut on the Stock Exchange worth more than Itaú , Bradesco and Santander – and without any physical branch.
The Roland Berger study that was prepared earlier this year considers two driving forces that would lead banks to close branches. One was the increased competition with fintechs, already fully integrated with 100% digital service, and the other was a low interest scenario, which had been affecting the bank spread (difference between the cost of funding and granting credit), something that affects your profitability.
PROFILES Claudio Gallina, senior director of financial institutions at the risk rating agency Fitch, says that this process of closing branches also reflects the change in the client’s profile, with the arrival of the younger – and digital – to the active economy. Gallina points out that, in addition to the first move made by banks, to close branches very close to others, now the remaining points should have fewer employees, as the flow of customers will be smaller.
Banks recognize that the process is ongoing. The president of Bradesco, Octávio de Lazari, said in a recent conference call that the bank will close 179 branches this year and will transform 377 into business units, which no longer have a cashier and are cheaper.
Before the pandemic, Bradesco tellers at branches performed 1 million authentications a day, whether from a bank slip or an account. Today, that number has dropped to 112,000.
In Bradesco’s new agency model, the economy is mainly safe. “Bradesco had 10,000 armed guards inside the branches. Expenses with strong cars were enormously expensive”, he said. In two years, a thousand branches were revamped.
Despite this, banks have stated that physical presence plays an important role in the business. “I always say that we have the branch network by conviction. We made an adjustment in the network in the last five years, a reduction of a thousand points of sale. We reduced the overlap a lot”, commented the president of Itaú, Milton Maluhy Filho, in a conference call about the results of the third quarter. “We still see good demand at physical points”, he emphasizes.
At Santander, the decision has been to have more physical units in the central regions of the country, exactly where the financial institution believes that the potential for growth is greater. “We are opening branches in central Brazil, where there is growth,” said the bank’s financial director, Angel Santodomingo.
Therefore, the institution took the decision to open service points in the Midwest, where agribusiness is booming. Even so, the Spanish bank closed 139 branches in the 12 months ended in September.
WIN-WIN. Professor at Fundação Getúlio Vargas (FGV), Joelson Sampaio says that this movement is the result of the digitalization of society – a phenomenon that, in the case of the relationship with banks, brought benefits both to companies and to customers.
“More people started to use digital services, and banks want to face up to fintechs and reduce their costs”, he comments. According to him, the agencies will also move towards having a new proposal, like the business units, which can be focused on other services off the banks’ shelf, such as investments, for example. Information is from the newspaper The State of São Paulo.
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