RIGA, Nov 27 (LETA) - The Bank of Latvia has developed and approved the "Regulations on the provision of financial services on site", which will ensure a wider presence of banks in the regions of Latvia, representatives of the Bank of Latvia informed LETA.

Given that the number of face-to-face customer service branches in Latvia has declined at the fastest rate among eurozone countries over the past 10 years, the aim of this initiative is to maintain a balance between digitization of financial services and face-to-face support for those Latvian residents and entrepreneurs in the regions who still need face-to-face services but are too far from the service branch and therefore have difficulty accessing them, the central bank said.

Bank of Latvia President Martins Kazaks explains that this decision will ensure better access to financial services in the regions.

This is very important, Kazaks says, because banks have digitized faster than people and businesses, creating a gap between banks and their clients. With this decision, the Bank of Latvia is correcting this, as good access to financial services is one of the cornerstones of economic growth.

According to the Bank of Latvia, at the end of 2013, banks in Latvia had 319 customer service branches, while in October 2024 - 69.

The central bank also notes that a significant share of Latvian residents and businesses are not satisfied with the availability of face-to-face services and consultations. Digitalization implies standardized solutions, which in many cases are not suitable for residents and businesses.

According to a survey of Latvian businesses conducted in the summer of 2024 by the market research company Rait on behalf of the Bank of Latvia, 28 percent of entrepreneurs believe that banks work in a standardized and bureaucratic way, without taking into account the specific needs of businesses. At the same time, 12 percent of entrepreneurs say that the lack of branches and face-to-face consultations reduces the possibility of establishing mutually beneficial cooperation, while 34 percent are not satisfied with the availability of branches.

The changes proposed by the Bank of Latvia will facilitate the provision of financial services in a way that promotes financial inclusion and access to financial services for all groups of society. The new regulations will set requirements for banks to provide face-to-face services.

This regulation will apply to those banks whose activities are oriented towards providing a wide range of services to the public and which are also planned to be designated as responsible for the provision of ATM infrastructure. In the current market situation, these are the four largest credit institutions in Latvia, namely Swedbank, SEB Banka, Citadele Banka and the Latvian branch of Luminor Bank.

The Bank of Latvia's regulations stipulate that on-site services must be permanently provided in the centers of the country's cities and largest municipalities (with at least 25,000 inhabitants) if the bank in question has at least 20 percent of the population of the city or municipality as their clients and there is no permanent customer service outlet within 40 kilometers of the bank.

In the center of the other districts, banks should have a presence, but not a fully permanent customer service branch where customers are served on demand.

The Bank of Latvia considers that the presence of credit institutions in the regions should be provided in a flexible and rational manner, and therefore credit institutions have the possibility to request exceptions if, for example, they can prove that the majority of customers in a given region are digitally active.

It is also planned to regularly review the rules and their practical application, clarifying criteria and conditions where necessary. Banks will have freedom of choice as to the most appropriate way of organizing the provision of services, so it is expected that their ability to establish successful cooperation with local governments could also play an important practical role, the Bank of Latvia notes.

On Friday, November 29, representatives of the Bank of Latvia will meet with the Latvian Association of Local Governments to explain the purpose and essence of these regulations to local governments.

The Bank of Latvia stresses that there will be no return to the past, when every small town had a bank branch working five days a week. Many people use financial services digitally and will not change their habits, so rational and flexible solutions must be sought that are designed for today's situation and have reasonable and justified costs.

The Bank of Latvia will collect and publish on its website information on the regional presence of banks.

Banks will be required to comply with the requirements of the regulations from January 1, 2026.