Lisbon, Oct. 22, 2024 (Lusa) - Portugal's consumer protection association, Deco, believes that banking exclusion is on the rise and that there are populations in the country's interior, especially older people, with decreasing access to banking services.
"Banking exclusion is on the increase, our 2022 study already pointed in this direction and it's increasing," Deco economist Nuno Rico told Lusa on Tuesday, saying that the impact is felt above all in inland areas, where there are older people who find it harder to use digital media.
"Banking is no longer for old people. There are populations in the country's interior who are being abandoned by banking. This has worsened" since Deco's 2022 study, he added.
Deco's 2022 study considered that "the weight of a banking system that is increasingly far from home and increasingly expensive is, above all, on the shoulders of the elderly", with the closure of branches having an impact on the countryside where a trip to a branch can take dozens of kilometres.
He then gave the example of a BPI customer from Vilar Formoso who had to travel more than 72 kilometres (round trip) to the nearest branch of his bank in Figueira de Castelo Rodrigo and someone from Barracos who was a BCP customer who had to travel 140 kilometres to the nearest branch, in Reguengos de Monsaraz, and return home.
Público's headline today reports that Caixa Geral de Depósitos (CGD) is "reducing services in the interior and islands" by transforming dozens of branches that until now offered all services (namely withdrawing and depositing money over the counter) into smaller spaces with fewer services.
On 3 October, Lusa reported on a statement by the bank's Workers' Committee in which it denounced CGD's “failure to comply” with its “duty of public banking service.”
Speaking to Lusa today, Jorge Canadelo, president of CGD's Labour Committee, said that this problem is occurring mainly in branches in the interior of mainland Portugal and on the islands. This is being done in a way that jeopardises the company's future sustainability and without any "critical vision" from the government.
"The shareholder [the state] has made a profit, but we're undermining [the country's] cohesion and jeopardising [CGD's] future sustainability. When the interest rate differential [the main contributor to the bank's profits] ends, we don't know if we'll have the raw material to generate more profit," said Jorge Canadelo.
Concerning CGD, Deco economist Nuno Rico believes that there is "an aggravating factor" in the bank ceasing to provide services in some areas because "since it has public capital, it would have a moral obligation to at least not contribute to this abandonment of older customers".
When questioned by Lusa, an official source from the public bank said that "it is completely false that CGD is reducing services, particularly in the interior or on the islands" and that "only in manifest bad faith can the investment of more than 70 million euros that Caixa is making in its extensive branch network be understood as a reduction in services, when it is part of a digital transformation plan that aims to serve its customers more and better wherever they are".
According to CGD, the creation of new generation branches "leaves no one behind and significantly increases its capacity to serve customers, particularly in terms of cash availability"
CGD says it will not "stand still in time, clinging to a past that no longer exists" and that the transformation plans aim to' ensure the future today".
In addition to reducing branches and banking services in the countryside, Deco says that even in the biggest cities, branch closures, lunchtime closures and limitations on treasury hours make it increasingly difficult to go to a branch and even lead to queues of customers outside branches.
What's more, said Nuno Rico, digital banking services are free or cheaper initially, but as they become widely used they are "significantly overpriced".
In the last decade, branch closures and a reduction in the number of bank workers have been widespread across Europe and have been contested by local populations and mayors.
In 2022, in Spain, a 78-year-old man (a retired surgeon and Parkinson's patient) set up a petition calling for less Internet and more human attention in bank branches, which garnered over 600,000 signatures.
According to the latest figures from the Bank of Portugal, there were 4,626 bank branches in 2022, 3,090 fewer than in 2012.
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