Investments in digital banking are cost cutting in disguise
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Investments in digital banking are cost cutting in disguise

Within three years a quarter of Europe’s bank branches could be closed – more if the rising M&A wave strengthens. When banks shout about investing in digital for their customers, they want investors to hear they are cutting costs. In the rush to become tech companies could they lose what keeps customers loyal?


In September, Sweden’s Handelsbanken announced that digitalization among customers has now reached such a point that it must invest SKr1 billion ($114 million) in IT over the next two years to take its digital customer offering to the next level.

The bank also talked about strengthening its presence at branches to deal with the complex needs of corporate and private banking customers. It also wants to grant greater access to specialist expertise.

But there was a catch.

The bank may be beefing up some branches, but there will be far fewer of them. Handelsbanken is closing almost half its branches, going from 380 to roughly 200. This is a cost-cutting exercise designed to trim annual running expenses by roughly 10% to SKr20 billion by the end of 2022.

Handelsbanken’s group chief executive, Carina Åkerström, didn’t get into any details of the technology itself – the apps, the platforms as a service, the application programming interfaces, the transversal tooling and the agile development – she went to the heart of the matter: discussions with trade unions over 1,000 job losses.

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