OP-ED by Alberto Aza

The author reflects on the challenges facing the sector, but which in reality affect society as a whole in addressing the challenges posed by the new economic model

In recent weeks, initiatives by citizens have gained particular notoriety, bringing to light the difficulties faced by the elderly in accessing financial services. Faced with a prolonged context of adjustments to the network of bank branches, this group alerts of a possible risk of financial exclusion and calls for a more personalised and less digital service.

In response to these demands, the banks have announced a set of emergency measures that will be operational within a maximum period of six months. These include extending opening hours, specific training for branch staff, preferential treatment for elderly customers both in person and over the phone, improving the usability of digital channels, and financial education actions to provide digital training for the elderly. This is a self-regulatory code that banks are required to comply with and which will be monitored periodically by the Ministry of Economy and the Bank of Spain to assess its effectiveness.

The ambition of these measures and the consensus reached for their implementation are evidence of the commitment of the financial institutions towards 'elderly' customers, in the belief that improving the quality of service should be the only way to understand the banking business.

However, although this emergency plan will contribute to strengthening the service provided to the elderly, in essence, the problem to be solved goes beyond the scope of action of the banking sector. As with other essential services, access to banking services by the elderly is a complex issue involving multiple factors and interdependencies, and therefore cannot be simply reduced to a sector-specific problem. Even less so in a country like ours, where the transformation of banking in recent years has enabled us to have one of the highest levels of financial inclusion in the world.

In fact, in Spain, access to financial services is guaranteed thanks to the efforts of financial institutions to diversify their customer service channels. It is pertinent to enumerate them here because they are significant in number: physical branches, mobile banking, online banking, telephone banking, ATMs, mobile branches, financial agents, and non-bank agents. In total, eight different, integrated, complementary and secure channels, a far cry from the only option customers had a few years ago when the focus was exclusively on the physical branch. Moreover, some of these channels score particularly well in international rankings. Spain is the second country in the Eurozone, behind France, with the highest number of branches per inhabitant; the same is true of the ATM network, which is on a par with Germany in terms of density and well above the European average; our banking system also stands out for being the second most digitalised in the world.

In light of the above, it seems reasonable to state that there is no structural problem in the provision of banking services and that the customer has more options for accessing banking services today than ever before. This observation is particularly relevant because, without it, it is easy to succumb to the temptation to hold the banks responsible for the risk of financial exclusion when, in reality, it is necessary to look beyond them for the epicentre of the problem. Specifically, in the relentless advance of the digitalisation of our societies - accelerated after the pandemic - and in the inexorable depopulation of rural areas.

It is widely recognised that digitalisation brings significant benefits for both users and providers of digital services. For the former, it offers the opportunity to access a wider range of products and services, in an agile, efficient and convenient manner and, in many cases, at a lower cost; for the latter, it enriches customer experience, expands markets and increases operational efficiency. Unfortunately, digitalisation also entails costs in terms of the digital divide for citizens who lack the necessary technological skills or resources. It is a widespread challenge in all societies today that cuts across a multitude of sectors, not just banking, and particularly affects the elderly. We are therefore facing a nationwide challenge that requires a comprehensive response from public authorities with the collaboration of the private sector where possible.

The depopulation of rural areas, a particularly intense phenomenon in our country, is also at the root of the issue at hand because the municipalities of the emptied Spain are mainly inhabited by elderly people. In this case, the lack of digital skills in these communities is compounded by the difficulties faced by public and private stakeholders in maintaining the provision of essential services, as the unstoppable exodus of customers undermines the viability of the face-to-face service model. The banking sector is no stranger to this reality and, as a result, its branches are being forced to close, just as schools, health centres and pharmacies have most probably done before them. Needless to say, the challenge of rural depopulation also requires adequate and ambitious public policies.

Based on what has been described so far, it does not seem right to blame banks for the problems generated by a demographic phenomenon such as the rural exodus, nor attribute to them the burden that a technological externality such as the digital divide generates among elderly customers. Indeed, these are structural challenges faced by the country that need to be addressed decisively if we really want to preserve the financial inclusion of our elderly.

In this regard, the implementation of the Recovery, Transformation and Resilience Plan through European funds should be seen as a unique opportunity to advance towards a more inclusive digital society and a more cohesive territorial model. To the extent that public administrations achieve this dual objective, financial inclusion will be assured beyond the palliative measures that banks can implement, now and in the future.