Banco de Bogotá is the entity that has closed the most offices in recent years.
Photo: Courtesy of Banco de Bogotà
It is likely that in recent years you have gone to a “old-fashioned” bank branch, as they say colloquially, and have been surprised that it is no longer there.
What’s more, it is also likely that when reading this article you will try to remember and realize that more than one bank office, from different financial entities, have disappeared.
What happened to those who worked there? Why does it seem that more and more banks are closing their offices?
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Figures managed by the Financial Supervision show that from 2019 to 2023, 728 bank offices have closed in the country, which translates into a “loss” of 12.9%. In other words, we went from having 5,616 to having only 4,888.
The list of banks that have closed the most offices since 2019 is led by Banco de Bogotá, with 253 closures. This is followed by Colpatria (123), Banco Popular (111), Bancolombia (108) and Bank of the West (101).
Those that report closures the least are CitiBank (6), Banco Falabella (15), Bancoomeva (17), Davivienda (20) and Banco Pichincha (22).
Contrary to what some might think at this point with the figures presented here, the closure of all these stores does not respond to a bad economic streak that banking in Colombia is going through.
What’s more, the main business of banks in the country has increased considerably since 2019, since the bank went from having a net portfolio (the total of loans that are active) of $441.95 billion in 2019, to one of $604 .73 billion in 2013 (a change of 36.83%).
What explains the majority of all these closures is in a concept that has been gaining popularity in recent years, digital transformation.
This consists of digitizing as many processes as possible that are traditionally carried out (by hand) by human beings. This is also accompanied by automation, that is, letting machines do all the tasks that are repetitive.
Specifically, what is being seen is a greater role for digital banking, that is, all the procedures that used to be done from a bank branch (transactions, withdrawals, credit requests, card blocking…) can now be done from a cell phone or computer.
The trend towards digital banking gained prominence after the challenges posed by the pandemic, as more adults (especially older ones) ended up adapting to the dynamics of doing their financial transactions from the comfort of their home.
This, in operational terms, translates into greater efficiencies for the bank, not only because they provide their users with greater immediacy in their demands related to financial products (they avoid lines and procedures), but because they save expenses related to rental of the spaces, payment of public services and salaries.
In fact, a few years ago Banco Itaú had to request authorization from the Ministry of Labor for collective dismissal (to dismiss 288 workers) in the midst of its commitment to advance digital transformation.
“This transformation is supported by the prior evaluation of the capacity that the organization needs to operate (…). These actions are aligned with a comprehensive and strategic perspective, aimed at responding to these new challenges, focused on our main objective of satisfying and serving customer needs, as well as strengthening Itaú’s operation in Colombia,” he explained at the time. the bank to El Espectador. In essence, what the company argued is that it must remain competitive in a changing environment.
The figures from the Financial Superintendency show that from 2019 to 2013 the bank lost 5,314 workers, evidencing a reduction of 4.86%, going from 109,208 employees in December 2019 to 103,894 during the same period in 2023.
The banks that have experienced the greatest personnel cuts are Colpatria (2,597 employees), Banco Popular (2,226), Banco de Occidente (1,570), Itaú (934) and Banco de Bogotá (866).
There are other cases, such as Bancolombia, which has experienced an increase in its hiring by 2,034 jobs, Banco Agrario (with more than 370) and Lulo Bank, with 301.
All of this is also explained because in the face of digital transformation, new needs for human talent are created in banking, such as software development, data analysis, programming and the development of artificial intelligence.
An example of this is that while Itaú was advancing the aforementioned layoffs, at the same time there would be 200 vacancies for talents specialized in big data, artificial intelligence, digitalization, new technologies and information management.
In short, banking, as well as another important number of industries, is going through this challenge posed by the 21st century called digital transformation. The way things are done is changing, and this has also impacted sectors as traditional as the banking business.
