Behind Spain, France is the second European country with the most bank branches per capita, with 549 per million inhabitants in 2017. Bank branch closures have already begun to accelerate across the country. A study by SIA Partners indicates that 12.6% of them could disappear by 2020.
Fewer and fewer branches
France had almost 39,000 bank branches in 2010, compared with 36,519 in 2018. Although the decline is fairly slight, it is set to accelerate by 2021, following the trend seen in other European countries. In Germany, for example, almost a quarter of all branches have closed in 10 years. According to data from the European Central Bank, the country now has just 33 branches per 100,000 inhabitants, compared with a eurozone average of 39.6 bank branches per 100,000 inhabitants.
Part of the reason for these closures is the decline in the number of customers visiting our outlets. The FBF reports that, on average, customers visit their bank two to three times a year. The study also cites the decline in profitability and in in-branch product sales.
Competition from online banks and mobile applications
After several years of decline, the disappearance of bank branches is set to accelerate in France. In March 2019, LCL announced the elimination of around 100 of its branches by 2021. To date, almost 20% of the bank's branches have already disappeared in less than 5 years. The sector is also stepping up plans to cut jobs: 530 at Société Générale and 446 at BNP Paribas. For its part, HSBC is planning to cut its retail business in France.
These decisions are mainly linked to the proliferation of online banks and mobile applications, which enable customers to benefit from services outside branches. One of the neo-banks overshadowing traditional banks is Nickel, which enables customers to open an account in partner tobacconists. With no overdraft possible, Nickel costs two to three times less than an ordinary bank account. In fact, the offer, which is available from as little as 20 euros a year, has met with real success: 1.5 million accounts have been opened since 2014. The craze is such that BNP Paribas bought the startup in 2017.
According to the results of the first Observatoire des banques en ligne et néobanques published in October 2019, 44% of customers use the account they hold with these players to domicile their income. It has to be said that mobile banks have a number of advantages, including responsive customer service and attractive rates. To remain competitive, the major networks are investing heavily in digital technology.