Over the last decade, the number of bank branches in Latvia has decreased by 80%, and currently, only about 70 locations in Latvia are used for face-to-face customer service. In Preiļi, as in many other small towns, there are no banks anymore. The nearest branches in Daugavpils and Rēzekne are more than 50 kilometers away. However, almost all Preiļians interviewed had to visit a bank at least once in the last year.
To encourage banks to return to the regions, the Bank of Latvia has submitted amendments to the Law on Credit Institutions to the Saeima, which provide for the restoration of the physical presence of bank staff in small towns.
"Financial services must be provided equally, both physically accessible and digitally accessible. Then the bank customer can choose which channel they will use, but it cannot be the case that it is only available digitally," said Mārtiņš Kazāks, President of the Bank of Latvia.
The draft law will be considered by the Saeima in early September. If approved by MPs, the amendments could enter into force after a one-year transition period to allow banks to prepare, or in 2026.
The largest banks, however, are skeptical about the renewal of branches.
"There will be nothing for those employees to do there," said SEB Bank board member Arnis Škapars. "Different regulations can be adopted, but I think that if there is no activity, if the bank has nothing to lend, if no new businesses are created, it will be very difficult to have a stable and lasting presence in such a place."
SEB believes that the solution could be not to re-establish a permanent branch, but to have mobile outlets that come once or a few times a month and accept customers, most likely in premises provided by the municipality.
Swedbank, which already uses mobile service teams in some cases, not only to provide services but also to educate customers, thinks similarly.
"This year we have visited more than 200 businesses, most of which are in the regions. And there we have spoken to more than 5,000 employees of the companies on a huge range of topics and we are not focusing and sales talk but more on financial literacy and financial education. A very popular topic is security in the digital environment, common understanding of the Latvian pension system and such educational activities," said Vadims Frolovs, Member of the Board of Swedbank and Head of Customer Service.
Moreover, the vast majority of customers already do everything they need to do via internet banking, mobile app or phone, so face-to-face meetings are becoming increasingly rare, according to the Board members of Swedbank and SEB Bank.
"In 99.4 percent of cases, customers interact with the bank via digital channels," explained Frolov. "More than 92% of our customers actively use internet banking. All people are coping," Škapars emphasised.
Meanwhile, the ATM network is currently optimal - both the central bank and commercial banks agree on this. This is largely thanks to a memorandum signed several years ago, in which the largest banks committed to ensuring cash availability. Currently, there are about 860 ATMs in Latvia and everyone can withdraw cash within 25 kilometers, according to information compiled by the Bank of Latvia.
"There are groups of people who still use cash. Cash is also an element of human rights - it ensures anonymity," said the President of the Bank of Latvia.
It is also possible to withdraw small sums of money in more than 100 rural shops with a bank card payment terminal.
