The number of branches managed by South Korea’s four major commercial banks has gone down by more than 20 percent over the past five years amid the rapid digital transformation.

According to a survey by Maeil Business Newspaper on Sunday, the country’s four major banks (KB Kookmin, Shinhan, Hana, and Woori) had 2,818 offices, including both branches and sub-branches, as of the end of 2023, down 20.1 percent from the end of 2019.

The number of branches stood at 2,628 as of the end of 2023, down 614 from five years ago.

KB Kookmin Bank closed down 254 branches over the five years while Shinhan Bank closed 165 domestic branches, Woori Bank 163, and Hana Bank 127.

The number of automated devices such as automated teller machines (ATMs), CD machines, and utility bill payment machines also decreased significantly over the same period.

KB Kookmin Bank saw 2,868 automated devices disappear over five years, while Woori Bank and Hana Bank saw decreases of 1,304 and 1,209 devices, respectively.

The trend is likely to continue in the coming years.

The issue, however, is that the loss of face-to-face branches is likely to reduce accessibility for the elderly and other financially vulnerable groups.

To address the issue, financial authorities introduced measures in April 2023 to prevent bank branch closures.

“As the digital financial market expands, banks are investing heavily in digital transformation, and there is a trend of restructuring sectors with high operating costs but declining usage,” said an official from a commercial bank.

The number of bank employees, in the meantime, has also been on a decline.

KB Kookmin Bank, Hana Bank, and Woori Bank saw the combined number of employees decline by 4,165 over the five years.

KB Kookmin Bank had 17,883 employees as of the end of 2019, which fell to 16,293 employees last year.

Woori Bank and Hana Bank slashed employees by 1,640 and 935, respectively, during the same period.

Shinhan Bank saw a decrease of 578 employees from the end of 2019 to the end of 2022.

“The total number of bank employees has been decreasing every year as banks have been receiving voluntary retirement for years to improve their jar-shaped personnel structure that presents a relatively large number of elderly employees,” said an official from a commercial bank. “While short-term costs are incurred due to severance payments, in the long run, banks see it as beneficial because labor costs decrease.”

By Park Na-eun, Yang Sei-ho, and Yoon Yeon-hae

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