The pandemic has accelerated plans for banks to cut staff by closing more branches and merging others, making the most of technological advances.
“The HB network model is changing and simple transactions are transferred through alternative channels such as ATMs, web apps and mobile apps. We aim to offer better and more pleasant services even on more important issues such as lending and insurance coverage, following the example of many banking institutions in other countries,” the source said.
A source at the bank confirmed that Hellenic had long-term plans to reduce its branch network, but the coronavirus pushed things up.
“We have found that our clientele has become more familiar with our alternative digital channels during the pandemic. Most transactions once carried out by tellers, such as deposits and withdrawals, are done at ATMs. In addition, we recorded an increase in the use of our mobile applications.”
Hellenic CEO Oliver Gratzke spoke to staff about the institution’s cost-cutting plans. “This will be based on a new long-term sustainable operating model that includes store closures, operational process automation, a more cost-effective structure, and empowering our people with new skills, new ways of working, and changes in culture and our way of thinking. Gratzke said. The Bank of Canada will also close more branches early. In November, head of corporate affairs Michalis Persianis confirmed management’s plans to “ensure the future” of the bank based on a ten-year roadmap.
The banks of Cyprus have been shrinking since the 2013 crisis, when there were 682 branches. According to the latest data provided by the European Central Bank, the number of bank branches in Cyprus has decreased to 386 by 2018, then to 328 in 2019 and 282 in 2020. The contraction accelerated with the takeover of Laiki Bank after its fall in 2013 and the demise of Cyprus Cooperative Bank in 2018.
Banks cutting their branch network have come under fire as rural communities are left without a bank branch, forcing locals to travel miles to reach neighboring villages or towns to get service. Banks have also been criticized by the recent increase in fees for services provided by a bank teller from 2 to 5 euros.
Critics argued that the increase is intended to discourage customers from going to banks for services, pushing them towards online cost-cutting solutions.