Spain’s Third Biggest Bank Just Made it Harder to Get Cash
by Don Quijones
WolfStreet.com
Nov 25, 2017
Spain’s third biggest lender, CaixaBank, has just launched a pilot project in Madrid aimed at limiting cash services in their branches to less than three hours a day, from 8:15 am to 11 am. After that point, all cash operations, including the settlement of bills and cash withdrawals and deposits, must be conducted through an ATM.
Caixabank is not the first Spanish bank to try out such a scheme, but it is the biggest. Spain’s fourth largest lender, part state-owned Bankia, has removed all cash services from select branches (including my local branch), forcing customers to withdraw or deposit cash at the ATM or travel further afield to another branch that still offers cash services.
It’s part of a broad trend. Bank branches are increasingly becoming so-called “customer advisory points,” where the primary role of branch staff is to sell customers a myriad financial products, many of them no doubt risky.
Those same customers are forced to perform many of the more rudimentary bank operations (cash withdrawals and deposits, transfers, payment of bills…) themselves, either at the ATM or online. It’s a great way of getting your customers to do your work for you while also cutting back on staffing costs.
Spain’s banking industry has already witnessed a savage cull of branch and office staff since the financial crisis began as many banks collapsed while those left standing closed many of their branches. In 2016 the total number of workers in the sector was 189,280 — 81,605 fewer than in 2009. What’s more, it’s a trend that shows little sign of ending, especially with most other banks almost certain to follow CaixaBank and Bankia’s lead in paring back their cash services.
But this is not just about saving money; it’s about trying to force a dramatic change in customer habits. The more difficult banks make it for their customers to use cash, the more likely those customers are to turn to alternatives, such as P2P payments and wallets, contactless cards, mobile money platforms or CaixaBank’s very own contactless payment bracelet. At least that’s the thinking.
In the last couple of years, Spanish banks have pulled out all the stops to promote cashless payments, but to little avail. As in Germany and Italy, cash is still very much king at the point of sale (POS) in Spain, accounting for 71% of all retail transactions in 2016 — compared to 74% in 2011. In other European countries such as the UK, the Netherlands, Poland and Sweden the decline in cash usage has been far more dramatic.
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