Digitalisation in Banks, Changing Branch Policies and New Trends

Abstract

Purpose- The aim of this study is to explain the effects of digitalisation and financial technologies on the branch policies of banks operating in Turkey and the trends that are likely to occur in the future regarding bank branches. Examples from different countries are given, and comments are made on the emerging trends and expectations.
Design/ methodology/approach- The study focuses on the reasons why banks branch out and close or merge existing branches. The trend of increasing usage rates of digital banking channels, which have become more preferred by customers following the development of financial technologies, along with changes in the number of bank branches and employees between 2004 and 2024, has been examined using quantitative methods.
Findings - In Turkey, the number of bank branches decreased by 1,894 to 9,329 by the end of 2024, representing a 16.9% decline compared to 2014, when the number of branches peaked. In parallel with this change, it was determined that the statistic between the decrease in branch employee employment and the number of branches was strong and positive. Similarly, it was determined that the statistic between the number of branches and the number of digital banking customers was negative.
Discussion- Although public-sector banks continue their branch expansion efforts in line with their mission, it has been debated whether their branch expansion policies will gradually decline over time in line with market dynamics, alongside factors such as public services, financial accessibility, and meeting cash needs. Furthermore, another point of debate is whether bank branches will continue to exist, albeit in smaller numbers, with a different concept, and enriched with digital elements, rather than a branchless banking approach such as digital banks.