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UBS is closing every sixth branch in Switzerland. But there is unlikely to be an uprising among clients – they have already quietly anticipated the closure for themselves, an analysis by finews.com suggests.

1. Corona Crisis Is the Best Reason

The corona lockdown last spring was something of a dress rehearsal for Swiss retail banking without branches: customers shifted to digital channels surprisingly smoothly. UBS would have opened only about half of its then 270 branches in Switzerland during the lockdown – with no significant impact on business. 28 branches remained closed after the lockdown ended, with another 44 closures now to follow.

UBS, like other banks operating nationwide, is pursuing salami tactics to avoid scaring away customers (see point 4) and to adapt to their digital habits.

2. Digital Success

Due to its customer structure, UBS cannot shift its Swiss retail banking entirely to the smartphone. Doing so would cut off the big bank's offering, especially to its older customers. But branch closures logically mean that customer contact is increasingly shifting to digital channels and the smartphone. Successful neo-banks such as Revolut or N26 as well as Switzerland's Neon, which have already eaten noticeably into the earnings of the established banks, show how well this works.

The branch closures serve UBS on the one hand to reduce costs and on the other hand to accelerate its digital efforts.

3. No Outcry Expected

Swiss Post has been closing branch after branch for more than 50 years – and hardly any closures go through without a protest from the affected customers. Is the UBS plan also going to be met with protests? There will certainly be angry customers. But there will not be a wave of protests. First, UBS does not provide an essential service like the post office. Second, the branch closures are a consequence of a change in customer behavior and not a re-education of customers.

In banking, customers with their digital needs are ahead of the offerings of a bank like UBS. In other words, the typical UBS retail client has long since accepted the closure of «his» branch.

4. Negative Interest Rates the Straw That Breaks the Camel's Back