Spain aims to follow UK's lead with 'bank hubs' in depopulated areas

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Spain aims to follow UK's lead with 'bank hubs' in depopulated areas
Similarly to the British scheme, the Bank of Spain could create new 'bank hubs' that provide basic banking services in offices shared by different banks. (Photo by LLUIS GENE / AFP) (Photo by CESAR MANSO / AFP)

Taking out cash in 'empty Spain' has become increasingly difficult in recent years, particularly for older Spaniards. Following the UK's example, the Bank of Spain is now trying to increase the number of shared 'bank hubs' in depopulated areas.


With hundreds of branch closures in recent years and an increasing number of digital services replacing traditional face-to-face banking, many Spanish people, particularly those living in rural areas, feel they’ve been forgotten by their banks.

In 2021-2022, around 11 percent of bank branches in Spain closed down as financial institutions attempted to cut costs under the premise that there was already a shift to online banking taking place among customers.

Between 2008 and 2019, Spain had the highest number of branch closures and job cuts in Europe, with 48 percent of its branches shuttered compared with a bloc-wide average of 31 percent.


This has forced many to travel further to find another branch, or struggle to access and understand internet banking.

In fact, over 700,000 Spaniards now don't have easy access to face-to-face banking services, nor branches or, in some cases, even cash points to withdraw money. That is around 1.5 percent of the total Spanish population (as of 2021) and this is a problem that overwhelmingly affects people who live in rural areas and and sparsely populated inland municipalities - a concept known as 'Empty Spain'.


It is estimated that the number of municipalities suffering from 'financial exclusion' in Spain is a staggering 3,389.

To try and solve the problem, the Bank of Spain is now working with financial institutions to pilot a programme extending alternative measures to face-to-face banking services in rural areas.

The bank's recent report: 'A review of the various initiatives deployed at the national and international level to address the risks of financial exclusion,' considers how other countries - notably the UK - have tried to tackle these problems, and outlines possible solutions to be piloted across rural areas of the country.

READ ALSO: How rural Spain is rebelling against rampant bank closures


Taking their lead from the United Kingdom, the objective of the pilot is to to guarantee financial inclusion in rural environments and the accessibility of elderly people with better face-to-face attention in offices, extension of hours and providing alternative ways to access baking services, including shared ATM's and branches, such as in the Netherlands and Sweden, according to the report.

The United Kingdom's pilot programme, supported by major banks and consumer associations, is known as 'Community Access to Cash', and was launched in December 2020 for a period of eleven months, but proved to be so effective that it was extended.

Similarly to the British scheme, Banco de España could create new 'bank hubs' that provide basic banking services in offices shared by different banks, and has also considered other initiatives, such as introducing cashback in local stores, something that has proved popular in Britain but also the Netherlands, Ireland and Luxembourg.

According to the report in Sweden, another country at the forefront of the fight against financial exclusion, large banks are forced by law to prove an access point to cash, whether a cash point or branch, within a radius of 25 kilometres to 99.7 percent of the population. The UK, as well as Finland, are working on implementing similar rules.

From an evaluation of the UK model, the report concluded that multi-bank branches generally cover most customers needs, and that the pilot program also had a significant impact on low-income people, something disproportionately prevalent in 'Empty Spain', by offering a free access to cash. 

According to Banco de España data, Spaniards over 65 make around 70 percent of their payments in cash, while 41.7 percent go to the bank to withdraw cash at least once a month, compared to just 13.3 percent of the broader population.

Figures from Eurostat suggest that although 65 percent of the Spanish population used online banking during the first three months of 2021, this figure was just 38 percent among people aged between 65 and 74.


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