Julien Eichinger - stock.adobe.c
BBVA to cut 3,000 jobs in Spain as digital technology transforms industry
Spanish bank is the latest to announce swingeing branch and job cuts amid increased digital competition
Spanish bank BBVA is cutting almost 3,000 jobs in its homeland as digital competition and transformation fuel the need to reshape it operations.
The cuts include more than 2,000 staff working in its branch network as the bank closes 480 branches in Spain.
BBVA had planned a higher number of job and branch cuts, but was forced to reduce them after pressure from politicians. It originally planned 3,800 job cuts and more than 500 branch closures.
The cuts will cost the bank €960m and save an estimated €250m a year from 2022.
BBVA said the increasing use of digital channels and competition from digital banks, with low cost bases, were major factors in its decision.
It said in a statement: “An adjustment plan is needed to ensure the competitiveness and the sustainability of employment in the future given the current context of profound transformation in the sector, marked by a tremendous competitive pressure, low interest rates, the accelerated adoption of digital channels by customers and the entrance of new digital players.”
Traditional banks everywhere face challenges with increased competition from specialist digital banks. These banks, known as challengers, have the advantage of a low cost base resulting from their automation of digital services.
Traditional banks are also balancing existing models, which have been used to serve customers for years, with new digital banking services. This is seeing costs cut through branch closures, job reductions and even the closure of offices, while their investment in technology increases.
Read more about tech developments at BBVA
- Early results from BBVA’s research into quantum computing shows that the technology’s application in complex computational tasks in banking is not far away.
- Could Atom bank’s deal with Thought Machine be a stepping stone for legacy replacement at BBVA?
- Spanish bank BBVA has the best mobile banking app in the world, according to Forrester Research.
BBVA is investing heavily in technology. It is planning ahead with a team of quantum computing experts established to research the technology’s possible benefits in banking. It expects quantum to be ready for some commercial computational tasks within the next five years.
It also recently created a cloud-based platform to give its share traders access to real-time market data and the ability to handle huge datasets.
The need to transform amid increasing competition has led to thousands of bank branches closing and jobs cut across Europe. There has been a recent bout of announcements as the restrictions caused by the Covid-19 pandemic have increased the use of digital channels, giving banks the opportunity to cut costs in traditional operations.
In January, HSBC said it would close a further 82 branches as part of its strategy to move customers to digital channels. The same month, Germany’s Commerzbank said it was closing more than 340 branches and slashing one-third of its staff, about 10,000, to cut costs, while it invests heavily in IT as part of its digital transformation.
These followed announcements from Ireland’s Allied Irish Bank and France’s Société Générale that they were also closing branches.