In recent years, thanks to an unprecedented economic and financial crisis, the introduction of regulations aimed at consolidating banking institutions and, finally, the rapid evolution of technological tools that allow customers to interact with their bank even remotely for a series of multiple and complex services, the banking system, not only in Italy, but in Europe and in the world, is experiencing a phase of profound change. In 2008, almost 8.525 credit institutions operated in the countries of the European Union with almost 238.000 branches. After 10 years, the number of banks dropped to 6.088 and that of branches to just under 174.000. The same goes for the United States, where in the same period the number of commercial banks dropped from just over 7.000 to around 4.700 and that of savings institutions from 1.200 to 690.
A similar trend has also been recorded in Italy. If, in fact, in 2008 there were 799 banks with 34.146 branches at the end of 2018 there were 505 with 25.409 branches. This scenario is profoundly different from that of ten years earlier which led everywhere to a structural change in the banking system and which inevitably led to a new way of developing the relationship with one's customers. In this sense, as already mentioned, the innumerable potential offered by technological development with the introduction of increasingly sophisticated "devices" that allow you to interact with your bank by carrying out increasingly complex transactions in a simpler and more immediate way has undoubtedly given an impetus in this direction. And the process does not yet seem completed if we consider that banks are often asked, in a situation which in the European case sees interest tending to zero or negative and small margins for credit institutions, to further strengthen themselves, improving the quality of the credit disbursed and containing costs, the latter objective generally obtainable precisely by reducing the number of branches.
This is a trend which in the end, aiming at an improvement in the efficiency of the banks tends, however, to alienate the bank more and more from its customers. But does all this risk having a price to pay or not? A recent attempt to answer this interesting question Working paper of the Bank of Italy "The effects of branch closures on credit relationships" which takes into consideration the years from 2010 to 2014. The results that emerge indicate that the closure of branches is associated with an increase in the probability of interruption of the relationship with the relative clientele and an effect, albeit weak, on the reduction of credit for smaller companies. Furthermore, the closure of bank branches recorded in recent years in these decidedly large proportions inevitably determines significant changes in the local banking structure, for example by reducing the degree of competition and this is already affecting the level of accessibility to credit by small businesses, a phenomenon which has already been brought to light with regard to the US market. Considering that in ten years the number of banking municipalities, i.e. that have at least one bank branch, has dropped from 5.922 to 5.371 (551 fewer municipalities, almost 10 percent of the total), it is even clearer how this absence risks having profound consequences on the economic development of these areas and how there can be no technological evolution capable of remedying this lack.
According to the study, the likelihood of interruption of a credit relationship due to the closure of a branch becomes greater as the distance from the other branches of the same bank increases. The system consolidation policies developed over the years have led to theemergence of large banking models which have seen the disappearance of local realities that enjoyed visibility, even if they already belonged to banking groups but still with a still distinguishable brand, and increased the distance of decision-making centers from the rest of the network, centralizing procedures to optimize costs but with repercussions on credit and on the ability to classify customers through direct contact and not through an algorithm.
Precisely for this reason, cooperative banks, as well as other local banks that base their experience and their activities on knowledge of the productive realities in which they operate, are called, above all, today to play an even more challenging role in the vacuum created by a banking evolution which has led to favoring a depersonalized bank model. In fact, most of the cooperative banks have rationalized the number of branches in recent years, deeming territorial coverage as an essential element of banking activity, especially for a bank with a local vocation dedicated to financing households and small and medium-sized enterprises. A natural policy given their history, seen in recent years the number of customers rose by around one million to over 6 million overall and which was also accompanied by important investments to promote and develop the digital channel, with 53 per cent of customers using home and corporate banking services, a figure which has doubled in the last ten years.
Rethinking the banking model so far promoted globally results, therefore, necessary if we really want to recreate that habitat that allows sustainable growth of the real economy, possible only starting from an in-depth knowledge of the individual realities and involving a large number of companies, even small ones, in order to favor that process of inclusion, diffusion and sharing of capital which has been the basis of the social and economic development of the most advanced industrial countries and which, on the other hand, risks being threatened by a reduction in the level of competition in the markets and by the reduction of that biodiversity which is only hoped for and never really defended.
°°°°The author is the Secretary General of the National Association of Popular Banks
