It was found that over 300 bank stores were closed last year. This is because the tendency to avoid in-person transactions and to prefer non-face-to-face channels such as mobile banking has increased significantly due to the Corona 19 crisis.
Although some analyzes say that the shrinking of banking stores is an irreversible phenomenon, there are also concerns that the financial alienation of the digitally vulnerable groups who are not familiar with non-face-to-face transactions such as the elderly may intensify.
‘304 stores’ bank stores closed… Maximum reduction in 3 years
According to the “Domestic Bank Store Operation Status” released by the Financial Supervisory Service on the 7th, 30 new stores including branches and branch offices last year were counted, while 334 stores were closed. This means that when one new bank store is opened, 10 existing stores will be closed.
The pace of store decline is getting faster and faster. The number of closed stores, which was only 23 and 57 in 2018 and 2019, respectively, was 304 last year, the largest increase in three years since 2017 (312). As a result, the number of domestic bank stores was totaled to 6,405, a decrease of 876 compared to 2015 (7,281).
Commercial bank stores in metropolitan areas were mainly closed. Kookmin Bank was the most at 83, followed by Hana Bank (74), Woori Bank (58), Busan Bank (22), and Shinhan Bank (21). In the area where closed stores are located, metropolitan areas such as the metropolitan area and metropolitan areas accounted for 251 locations (82.6%).
Store closure is a trend of the times… “In regions other than the metropolitan area, keep the minimum store”
As banks’ store closures are accelerating, concerns about the financial alienation of the elderly and digitally vulnerable are also growing. Accordingly, the financial authorities also improved the system for the’joint procedure related to the closure of bank stores’ to conduct a preliminary impact assessment before the store closes, and began to manage the results by receiving a report.
An official from the Financial Supervisory Service said, “We are going to lead the way to faithfully implement the’joint procedure related to the closure of bank stores’ so as not to cause inconvenience to financial consumers due to the reduction of stores.”
However, there is an analysis that strengthening internet banking channels including mobile and reducing face-to-face sales is not only a bank’s management strategy, but also an irreversible trend of the times.
In fact, according to the Bank of Korea, at the end of last year, the number of registered customers for internet banking at domestic banks was 17.37 million, an increase of 7% compared to the end of the previous year. The number of uses and the amount of money also increased by 11.9% and 20.6%, respectively. An official from the banking sector emphasized, “We fully understand the concerns of the financial authorities, but it is the only area of the bank’s autonomous judgment to sort out stores that are inefficient compared to maintenance costs such as labor costs.”
Experts advised that the metropolitan area, where banks are concentrated, remains in an autonomous area, and that it is necessary to focus on managing only those regions with limited financial access. Professor Kim Sang-bong of Hansung University said, “The reduction of bank stores is not a phenomenon that the financial authorities can prevent.” said.
Jeonghyun Kim reporter [email protected]
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