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Branch deaths in Germany: How safe is Sparkasse Sternberg?
Savings banks in northwest Mecklenburg are closing branches. Customers are wondering which banks will stay permanently. Online banking is increasing.
Branch deaths in Germany: How safe is Sparkasse Sternberg?
Nowadays, more and more customers are wondering what the future of banks and especially savings banks is. A current example from Sternberg shows that the closure of branches is also a hotly debated topic in rural regions. Loud Northern Courier Sparkasse Mecklenburg-Schwerin closed five of its branches last year alone. This represents a challenge for many customers, especially those who rely on personal advice and service.
The branch relocation is not just a phenomenon in Sternberg - Germany's banks and savings banks are also closing many locations overall. Loud n-tv 1,631 bank locations had to close in 2023, which corresponds to a decline of 8.4 percent. As a result, the savings banks have given up 178 branches and are slowly losing physical locations, even though they continue to have the largest share of the German banking sector with 6,926 branches.
Online banking on the rise
One explanation for this decline is the change in customer behavior: over 63 percent of customers now use online banking, while more than a third continue to rely on branches. The CEO of Sparkasse Mecklenburg-Schwerin, Kai Lorenzen, emphasizes that the closures reflect changing user behavior and plans to further expand the online banking offering. Despite the closures, the Sternberg branch will remain open and no further conversions to self-service locations are planned.
There are currently 22 Sparkasse Mecklenburg-Schwerin branches in the region and an additional 19 locations with self-service facilities. This shows that the Sparkasse continues to emphasize the importance of a dense service and advice network in order to meet the needs of customers.
The future of branches
To get to the point: the future of banks is all about digitalization. A look at the numbers clearly shows this. While savings banks are reducing their number of branches more slowly than major banks, there is also a clear trend here. In 2022 the decline was already around 5 percent, in 2021 it was 6 percent. And the earnings situation is not exactly rosy given the current low interest rates.
The closures are unlikely to stop unless there is a sustained shift in the use of banking services. As banks try to find the balance between traditional service and digital efficiency, challenges remain significant. It remains to be seen whether the Sparkasse in Sternberg will successfully navigate this course.