Many attributed this phenomenon to the internet as going online freed us from substantial banking operations especially those involving our daily living. After all, we now pay bills, transfer funds, send money to people mostly online, and we can even initiate loan applications by internet. 

However, a sudden and noticeable trend has recently taken place. A quick walk along the upmarket neighborhood of Madrid and other major cities, one is welcomed by a flurry of banks that are opening. Earlier this year, CaixaBank inaugurated a 750 sqm-unit at Calle Serrano 7 and has recently announced the lease of a massive 3,910 sqm-office on Plaza de Colon 1. Pibank, an Ecuadorian bank focused on online banking, has recently commenced operations on Calle Velázquez. Joining the bandwagon is Bankia that will launch a 1,800 sqm-office at Serrano 53. In Barcelona, CaixaBank, BBVA and Banco Pichincha have been active in establishing new branches in the downtown area. 

In view of this streak of bank openings, one may be compelled to ask what has transpired from the time they announced the closure of banks up until now. Have car sales and home acquisitions started to pick up eliciting a need for bank branches to attend loan and mortgage applications? Have banks realized that nothing beats face-to-face banking operations to provide the utmost service? Is the affluent and important blue rinse generation bucking the trend in Spain?

From what we can observe, banks are back in fashion. They have followed the expansion strategy of fashion brands securing large spaces for their flagship stores. Banks have changed their expansion model closing smaller, underperforming branches to set up larger ones, their own version of flagship stores. All of this gives rise to a new technological, customer-centric office model.

Will banks continue to close branches? Yes, if they are small and underperforming. For real estate consultancy firms, the initial consequence is that they will lose some clients, as banks downgrade their needs for smaller retail space. But the advantages outweigh the concerns. Quite a number of banks occupy premium locations. Hence, when they close branches, these spaces can be coveted retail addresses that real estate agents can always fill up, perhaps even at a higher price. And if these branches in prime locations happen to be for sale at the right price, there will surely be retail opportunities for several investors who seek sound investment schemes. A case in point is Gran Vía 44, where Bankia used to operate a couple of years ago.  Since the bank vacated, the site has been sold twice within the same year and is now the flagship restaurant of the American burger chain, Five Guys. 

Following the footsteps of fashion brands´ flagship stores, are we perceiving competition between physical branches and online banking? Do customers prefer the teller or the keyboard? Truth be told, a lot of people still need face-to-face banking for important transactions like loans, mortgages, initial deposits, safety deposit boxes, initial investment in bonds, equities, and trusts, and for older customers who prefer talking to humans rather than laptops.

Moreover, for Banco Santander, diversification has refocused their core business. Three branches in Madrid, named Santander Work Café, are now offering not only banking facilities, but also a cafeteria and coworking space in the same office. Will Banco Santander be the trendsetters for the future of banking?

After what we have seen with banks repositioning themselves, even though at one point it looked like they were disappearing, they never really left. They will be with us for as long as we need them.