In the last 5-6 years, there have been numerous discussions over the future of bank branches due to rapid digitization across the regions. Suppose we compare the trend of bank branches for India, Europe, and the US. While there is a sharp decline in the number of branches for Europe and the US, the bank branches are increasing in India.
In Europe, the declining trend is visible in almost all countries.
3511 Bank Branches closed in the UK alone from 2015-2020, with Natwest, Barclays, HSBC, Lloyds, and RBS closing more than 400 branches each.
Trends of other countries like China, Indonesia, Brazil, Korea, Canada, and Kenya are also shown below.
But what most of the research firms are not comparing is the density of these bank branches across the globe.
Let's look at the trend of Commercial Bank Branches per 100,000 of the adult population for countries/regions. It is visible that the developed countries still have >20 branches per 100,000 adults as against the developing countries where the ratio is still below 15.
This single factor is one of the critical reasons apart from digitization, leading to an opposite trend in opening new bank branches in developed and developing regions.
Approximately 5,000 new branches are being opened in India by various banks from 2017 to 2021.
Bank Segment Wise New Branches Opened from FY 2005-06 to FY 2020-21 in India
We might see an increasing trend in number of branches for India atleast for next 5 years owing to lower density of branches as compared to developed nations.
Source : Statista, Knoema & RBI.