STRATEGIC PARTNERS
January 21, 2003
RAERD, The Netherlands -- Dutch banks that have closed branches in rural areas to save money have found that a significant number of their customers are elderly people who can't, or don't want to, use ATMs or the Internet.
According to a Bloombergreport, some banks are trying to bridge the electrical divide by offering courses for seniors on Internet banking and ATMs, in addition to using more unconventional means such as sending buses driven by bank tellers to remote locations.
Both ABN Amro, the biggest Dutch bank, and Rabobank, the third largest, are using these approaches.
Rabobank employee Jan de Bruin has driven a bus to Raerd, a village of 600 people located 150 kilometers (about 93 miles) northeast of Amsterdam, twice a week since the branch closed in 2001.
"People are thankful that we still come to serve the village," said De Bruin, who has been at the bank for 28 years, the past 18 months on the bus. "It's a bit of service. And I think service has got worse in recent years."
Banks in Europe have shuttered branches to trim costs, and Dutch banks, including Rabobank and ABN Amro Holding, have been among the most aggressive. More than 1,600 branches, or one in four, have closed in the Netherlands in the past four years.
ABN Amro is trying to save €400 million a year (about $428.7 million U.S.) through job cuts and branch closures at its retail unit, for which profit rose 37 per cent to €173 million (about $185.4 million) in the first nine months of 2002. Rabobank has cut about 250 branches in the past two years
The closures have created a political backlash as senior groups and politicians complain about dwindling service levels, especially in rural areas.
Ferd Crone, a member of parliament from the Dutch labour party PvdA, is expected to submit draft legislation that would prevent banks from abandoning small towns in late January.
Bank officials say they hope the proposal will be watered down from Crone's original plan to require banks to keep at least one branch in every town with 10,000 people. They would also have to ensure that customers didn't travel more than three kilometers (about 1.8 miles) to access their cash.
The banks have been looking for creative ways of appeasing their customers at a reasonable cost. In Drachten, Rabobank has a fleet of five two-seater Smart cars to shuttle customers to and from the branch. Postbank, a unit of ING Groep, is seeking partnerships with 400 retailers so customers can withdraw up to €250 (about $268) a day at the local businesses.
Dutch consumers pay some of the lowest charges in Europe. A basic account at Postbank is free, and for €7 (about $7.50) a year its customers can have unlimited use of ATMs for cash withdrawals in any of the 12 countries in the euro zone.
Hein Blocks, president of the Dutch Bankers Association, said, "People see banking as a public utility, but no one is saying the bakery should have to stay open, or the hairdresser. It's a broader public issue than banks."
Several independent ATM deployers based in the UK have expressed interest in the Dutch market. Perhaps most notable is Moneybox Corporation, which announced in late October that it had secured a contract to install 50 ATMs at McDonalds restaurants throughout Holland.
Moneybox Nederlands, a joint venture between Moneybox and SNS Bank launched in November of 2001, has also installed ATMs in locations such as Van der Valk hotels, Accor hotels, leisure parks and gas stations. Moneybox plans to roll out approximately 750 ATMs, which carry a brand called "Flappentap," in the country by the end of 2003.
Moneybox levies a convenience fee of €1,59 (about $1.56) per cash withdrawal at its ATMs in the Netherlands.
(See related story Moneybox to install ATMs at McDonald's in Holland)
The trend of dwindling branches is not confined to the Netherlands. Deutsche Bank, Germany's biggest bank, has shut 25 percent of its branches, and Switzerland's UBS closed almost half its branches in the past five years. Italy's Capitalia is selling 145 branches to rivals.
