Commerzbank's Head of Private Clients, Thomas Schaufler, sees the traditional bank branch losing significance in the near future. He shared this perspective during an interview with Deutsche Presse-Agentur, hinting at all banking topics becoming accessible via the advisory center and online channels within a few years. Despite this, Schaufler believes that physical branches will still hold value for some customers and remain a vital part of Commerzbank's overall strategy.
This shift in strategy isn't a recent development. Before the COVID-19 pandemic, Commerzbank boasted around 1,000 brick-and-mortar locations nationwide. However, the bank has since drastically reduced its branch network, now counting approximately 400 branches, with Schaufler expressing satisfaction with the current count. Interestingly, the bank's decision to scale back its physical presence hasn't led to a substantial drop in its customer base, as surprisingly few clients have left due to the reduction in branches.
Regarding branch opening hours, Schaufler is not in favor of expanding them at this time. He believes that the bank's advisory center, which is also available on Saturdays, adequately bridges the gap between in-person and online customer interaction. Despite the move towards digital services, Schaufler acknowledges the importance of demonstrating where Commerzbank can offer added value to its clients. Among the ways the bank plans to do this is by providing financial analysis services that analyze customers' income and expenditure, thereby helping clients make better financial decisions, such as determining whether insurance can be bundled or whether there's room for savings.
Schaufler also touched upon the topic of overnight interest rates. While interest rates have risen since the European Central Bank (ECB) reversed its interest rate policy, Schaufler does not intend to participate in the race to offer the highest overnight interest rate. Instead, his strategy focuses on transforming savers into investors by showcasing the long-term opportunities to combat inflation.
Commerzbank's evolving strategy in the face of digital advancements involves several key aspects, including expanding its digital distribution channels, strengthening branches, modernizing its payment business, engaging with employees, reducing its workforce, and forming strategic partnerships. All of these components are designed to balance the bank's digital adaptation and the continued relevance of physical branches, ensuring customer satisfaction and operational efficiency.
Source:
Enrichment Data:
Commerzbank's strategic plan to adapt in the face of digital advancements includes:
- Digital Expansion and Omnichannel Approach - Commerzbank aims to intensify its digital distribution channels, with over 90% of customer contacts already being digital, and 50% of product sales in the Commerzbank brand are concluded digitally. The bank also plans to reinforce branches by adopting an updated advisory model that frees up more time for personal customer consultation services.
- Customer Advisory Services - The bank will sharpen its two-brand strategy with differentiated price and product offerings, with Commerzbank offering a comprehensive range of services and personal advice alongside extensive digital offerings. Comdirect, the bank's digital primary bank, provides core services for saving, investing, and securities trading.
- Modern Payment Business - Commerzbank is targeting the modernization of its payment business and strengthening its omnichannel approach, including expanding new loan volumes with private and small-business customers and improving payment efficiency through digital solutions.
- Employee and Customer Engagement - To maintain employee motivation and attraction, Commerzbank focuses on a modern, flexible workplace concept and introducing an employee share program. These measures aim to boost performance and maintain the bank's employer appeal.
- Restructuring and Job Reductions - As part of its cost reduction strategy, Commerzbank plans to reduce its workforce by approximately 3,900 full-time equivalent (FTE) positions by 2028, primarily affecting central staff functions and operations in Germany. However, the bank anticipates an increase in staff in selected areas like international locations and mBank, keeping the overall workforce count unchanged at 36,700 FTEs worldwide.
- Strategic Partnerships - Commerzbank has entered into strategic partnerships, like with Visa, to enhance its payment services and access future payment innovations. This partnership supports Commerzbank's strategic direction in payments, ensuring the bank's access to future payment technologies.
These components, working together, aim to balance Commerzbank's digital shift and preserve the relevance of physical branches, ensuring both customer satisfaction and operational efficiency in the expanding digital banking landscape.
