Biggest Swedish Mortgage Bank Reinvents Branches in Cashless Era

The biggest mortgage bank in the country that’s closest to being cashless is reinventing the concept of the client-facing branch.

Swedbank AB Chief Executive Officer Birgitte Bonnesen says branches need to fit better in a world where more and more customers do their banking online. She says many of the people visiting branches now do so not to ask for loans or other traditional banking products, but to seek help in using the latest banking app on their mobile phone.

“Sweden is more or less a cashless society, so when people come into a branch lots of times you come in because you now have an app and you don’t know how to use it, so it’s more like a support thing,” Bonnesen said in an interview at Swedbank’s headquarters in Stockholm. “Or, you have this unit for the Internet bank that’s not working or you want to ask about a structured product you saw in the newspaper that morning.”

Turning parts of the branch network into support centers will help Swedbank cut costs further as banks in Sweden gird for a fresh round of capital requirements, taxes targeting the financial industry and pressure from negative central bank rates. Together with the spread of digitalization, that’s led Swedbank to reduce staff and close hundreds of branches in recent years as visitor numbers fall.

In an interview in April, Bonnesen said Swedbank needs to become even leaner than it is now. She says the bank’s Baltic unit shows that more can be done in Sweden on costs.

“We need to become more flexible,” said Bonnesen, who took over as permanent CEO last month after Michael Wolf was ousted in February. “In the end it will help us cut costs. Over time, there will be fewer people working.”

While Swedbank “will always have lots of touch points physically in Sweden,” they “will look different” from now, Bonnesen said. The bank will use its branch network transformation in the Baltics as inspiration, she said. In Latvia, customers can get assistance with Internet banking from staff at libraries, while elsewhere, ATMs are staffed for a few hours each day to help clients.

In Sweden, Swedbank could use its real estate broker Fastighetsbyraan as a venue where customers can get services and advice, Bonnesen said. The unit has 250 offices and 1,500 employees across Sweden and in parts of Spain. The bank is evaluating its branches, looking at the number of customers, traffic to the branch, the questions they ask and what services they request.

“The more products we get digitalized, the more people will just have to come in and check things -- it’s a different conversation,” Bonnesen said.

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