South Korea’s financial sector is fast shedding jobs, hit by protracted economic slowdown and low-interest rate environment along with proliferation of automated and online services.

According to data released by the Financial Supervisory Service (FSS) on Monday, the number of workers at the nation’s public and commercial banks stood at 132,170 as of the end of June this year, the lowest since December 2006.

The figure has been on a steady decline since 139,840 in December 2008. The nation’s banks shed 1,661 employees last year as they encouraged workers for early retirement programs to save costs. They reduced additional 1,450 jobs in the January to June period this year. KB Kookmin Bank cut the most number of staffs of 407, followed by Woori Bank of 167, Shinhan Bank of 123 and Industrial Bank of Korea (IBK) of 100.

The banks have been hiring fewer employees while shedding senior levels through voluntary retirement program. Only Shinhan Bank and Standard Chartered Bank Korea conducted new hiring in the first half of this year, and the number of jobs they added was just 40 percent of bank job placement offers in the same period last year. The new hiring in the latter half is also expected to decrease by 30 percent.

Another factor behind the slimmer workforce in the financial sector is the lesser need of brick-and-mortar presence due to spread of mobile and online services. More than 100 bank branches close down every year. As of the end of June this year, the number of bank branches amounted to 5,297, 115 fewer than the same period last year.

The data found that the number of employees in the insurance industry as of end-June was also the lowest in five years. A total of 59,444 people were employed in the sector, the lowest since December 2011 when the figure stood at 57,861. The number of workers at life insurance companies fell to the lowest of 27,105 in June since the same month in 2011 of 26,717, and non-life insurers had 32,339 workers in the same month, also the lowest since June 2012.

By Noh Seung-hwan

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]