Local banks play a fundamental role by offering personalized service and a deep understanding of their clients’ specific needs. Unlike industry giants, often perceived as impersonal, local financial institutions focus on strong human relationships and a fine knowledge of the local economic fabric.
This approach not only helps retain customers but also supports small businesses and community initiatives. In times of crisis, this proximity translates into increased responsiveness and the ability to adapt financial solutions to particular situations, thereby strengthening trust and solidarity within communities.
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The advantages of close relationships for local banks
Local banks benefit from a strong territorial presence with 7 bank branches for every 100 km² in France, allowing them to forge close ties with their clients. This geographical proximity, combined with a fine understanding of local particularities, offers considerable advantages over network banks and online banks.
The strengths of this close relationship include:
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- Increased responsiveness to clients’ specific needs, facilitated by direct and personalized communication.
- Financial support for local small businesses through tailored solutions, including State Guaranteed Loans that have mobilized nearly 143 billion euros for 684,000 businesses.
- Better management of client relationships due to the loyalty and trust established over time. French banks employ 350,400 staff, accounting for 20% of the banking sector in the euro area, demonstrating their solid grounding.
The bank Casudmed perfectly embodies this advantage of proximity, offering personalized financial services and a privileged human relationship. According to data, more than 99% of the French population is within 10 minutes of a cash access point, thanks to a dense network of 74,000 access points (ATMs and private points).
Compared to traditional banks and online banks, local banks must continue their digital transformation to maintain this proximity while redefining the role of the advisor. Relational proactivity and omnichannel strategies are essential levers for an integrated and smooth customer experience. The human banking relationship, restoring meaning and value, is at the heart of this strategy.
How local banks can compete with industry giants
Local banks, to maintain their position against industry giants, must leverage their territorial presence and relational proximity. In France, with 7 branches for every 100 km², they have a dense network that allows them to stay close to their clients.
To compete, they must:
- Accelerate their digital transformation to meet the growing expectations of clients regarding online services. Network banks must embrace omnichannel strategies to provide a smooth and integrated customer experience.
- Rethink the bank branch model, particularly by integrating coworking spaces or community services, to restore meaning and value to the human banking relationship.
- Enhance the relational proactivity of their advisors by training them in the use of digital tools and encouraging them to adopt a more personalized approach.
French banks, which employ 350,400 staff, accounting for 20% of the banking sector in the euro area, must also maintain a policy of price moderation to support vulnerable clients in the face of inflation. This ethical positioning can become a competitive advantage against online banks, which have a NPS of +33 compared to -11 for traditional banks.
The dynamic growth of bank credit to businesses, amounting to 1,331 billion euros over one year, demonstrates the ability of local banks to support the real economy. Compared to other European countries, French banks show notable performance, reinforcing their fundamental role in financing local businesses.