Bank branch closure and cash access in Spain

Abstract

This article describes the importance of cash and the impact that the reduction of branches has on cash access, and looks at the compensatory measures taken by financial institutions to mitigate its effect on the Spanish population. Cash continues to be the most common means of payment in Spain. The latest Banco de España survey shows that it is the payment instrument preferred by 53% of the population, evidence that is consistent with that of a recent study by the European Central Bank (ECB). The banking consolidation in the Spanish financial system has brought the closure of bank branches, a process that could be attributed to the need to adjust capacity and to reduce costs after the strong expansion of previous years. Since 2008 the number of branches of deposit-taking institutions has decreased by 17,873. Andalusia continues being the region with the largest number of branches although it is also the most populated and the second largest region of Spain. This same phenomenon of branches closing has occurred in the euro area countries, although in lower magnitude. Besides the high number of closings, in 2017 Spain continued to rank among the countries with the highest number of branches per inhabitant but the differences with other country members have been reduced.