This week we watched the announcement that Scotiabank was reducing the number of branches in our province. Scotiabank has a very long history here and has given notice it is closing no less than eight branch banks in Newfoundland. It is part of an overall downsizing across Canada. Scotiabank says it is reducing its work force by a full three per cent. A spokesperson for the Canadian banking giant confirmed in a series of emails that branches in Grand Bank, Twillingate, Lewisporte, Bonavista, Burgeo, Flowers Cove, Deer Lake and Whitbourne will close.
The communities involved are to rise up in protest but investors across Canada are not raising the hue and cry over downsizing. In fact, investors see it as part of the natural result of market pressures. Scotiabank is in the business of making money and they are good at it. You are not going to like this much but I understand it. It is the way things are in the modern world. Let me ask you a question. When was the last time you were actually INSIDE a bank? It has been a couple of years for me, when I was headed to Europe and needed to change dollars into Euros before the trip. I don’t need to go to a bricks and mortar building usually. I get my banking done at my desk, at home, by computer. People hate this argument.
I heard on the radio on Tuesday that some people like the process of going into a bank and dealing with a teller. Well, good for them but I must ask – at what cost? It is, my friends, the great question in our changing world. Do we need physical banks like we used to? Consider for a moment a similar issue with public libraries. There is always a racket when the suggestion of closure of libraries comes up, but a logical mind asks – do we need them like we used to? Nobody reads more than me. It has been my life. I read at work and while at leisure. I read in the bath and I read at the dinner table and I read at all points in between. When was the last time I set foot in a public library? When was the last time you were in one? You see my point.
You can’t keep a bank open because people like going to them as a sort of modern social event. Of course, people, especially older ones, like the banking experience. There is a familiar ring to this like the Canadian Tire situation. On weekdays Canadian Tire and places like it are busy with older people like me just out on a shopping experience. We like doing it but that is no reason to keep a Canadian Tire store or a Scotiabank or a lemonade stand open because it is familiar and gives us interaction with other people. The decision is a business decision and I understand it.
It is something I’m afraid the world must come to understand. We can’t expect loyalty from institutions. If you want loyalty, go out to a dog shelter and get yourself a nice spaniel. He will love you forever. The puppy doesn’t have to make a profit or answer to shareholders. The bank does and has to compete with other banks. They may give you a nice desk calendar for opening a new account, but they won’t keep a branch open when the laws of economics say it should close.
You can contact Jim Furlong at [email protected]