Digital transformation of Spanish banking

The report of KPMG and the Fundación de Estudios Financieros (FEF) aims to analyze the new challenges and trends in the banking sector in Spain, accelerated by Covid-19: digital transformation, the change in customer behaviors, the emergence of new players such as Neobanks, FinTech and BigTech, the development of digital assets, the emergence of the regulatory sandbox, etc.

The main conclusions of the report in relation to the changes in customer behaviors and the business model would be the following:

• The pandemic has accelerated the use of digital channels in Spain:

‑ 50% of financial products were sold online in 2020, reaching peaks of 60% during the hardest months of the lockdown.
‑ 6 out of 10 Spaniards surveyed have already replaced physical banking with digital banking.
‑ Most banks have more than half of their customers going digital.
‑ Cash withdrawals at ATMs continue to decline, while digital payments and in-store payment terminals continue to increase.
‑ The ratio of branches at the end of 2020 per 100,000 inhabitants in Spain (48) is well above the European Union average (22) despite closures in recent years.

• Digital divide and financial inclusion: Despite the above data and the advances in the use of digital channels, there is still a senior or analog customer base that will require a hybrid service based on physical presence and digital training as well as more imaginative solutions (such as mobile offices or the agreement with the National Post to provide cash launched by Santander).