The pandemic has accelerated banks’ plans to downsize by closing more branches and merging others while making the most of technological advancements.
News site Stockwatch quoted Hellenic Bank sources saying the group will be closing a number of branches across the island to rationalise its network.
“HB’s network model is changing, with simple transactions being transferred to alternative channels, such as ATMs, the web and mobile applications.
“We aim to offer better and more enjoyable services even for more important issues such as lending and insurance coverage, following the example of many banking institutions in other countries”, said the source.
The banking source confirmed that Hellenic had long term plans to reduce its branch network, but coronavirus has pushed things along.
“We have established that our clientele has become more familiar with our alternative digital channels during the pandemic.
“The majority of transactions, once carried out with the assistance of tellers, such as deposits and withdrawals are being carried out at ATMs.
“Furthermore, we have recorded an increase in the use of our Mobile applications.”
Stockwatch recalled that Hellenic CEO Oliver Gratzke laid out the institution’s cost-cutting plans to staff.
“This will be based on a new long-term sustainable operating model that includes store closures, automation of operating processes, a leaner structure and empowerment of our people with new skills, new ways of working and changes in culture and our way of thinking,” Gratzke had said.
Stockwatch also quoted sources from the Bank of Cyprus, confirming that BoC will also shut down more branches ahead of schedule.
In November, the head of the corporate affairs department, Michalis Persianis, confirmed management plans to “future-proof” the bank based on a ten-year roadmap.
Cyprus’ banks have been downsizing since the 2013 bailout crisis when branches numbered 682.
According to the latest data provided by the European Central Bank, bank branches in Cyprus dropped to 386 by 2018, then 328 in 2019 and 282 in 2020.
The shrinkage was accelerated with the absorption of Laiki Bank following its downfall in 2013 and the demise of the Cyprus Cooperative Bank in 2018.
Banks reducing their branch networks has come under criticism as rural communities have been left without a bank branch, forcing locals to travel for miles to reach neighbouring villages or towns to get service.
Banks have also come under fire over recent increases in charges for services conducted with the assistance of a bank teller from €2 to €5.
Critics argued that increases aim to turn customers away from walking into banks for services, pushing them to online solutions to reduce costs.