• Thu. Dec 1st, 2022

Banks continue to cut offline branches amid rising mobile banking

ByCindy J. Daddario

Mar 30, 2022

SEOUL, March 30 (Yonhap) — South Korean banks continued to reduce the number of offline branches in 2021 as part of efforts to cut costs amid increased use of mobile banking, revealed data on Wednesday.

The number of physical branches run by local banks stood at 6,904 at the end of 2021, down 311 from a year earlier, according to data from the Financial Monitoring Service (FSS).

The number has declined, with the pace of decline accelerating in recent years. The 2021 reduction was larger than the 57 branches closed in 2019 and the 304 in 2020.

The downward trend is due to increased use of mobile banking services, which have grown in popularity amid the coronavirus pandemic, as well as banks’ continued efforts to cut costs by closing offices and reducing the staff.

The emergence of internet-only banks, such as Kakao Bank, has also played a role in prompting major banks to step up their cost-cutting efforts and expand their mobile banking services.

Shinhan Bank saw its number of offices drop by 75 year-on-year in 2021, the most among all banks, followed by KB Kookmin Bank with 58 and Woori Bank with 53.

There are growing concerns that the dwindling number of bank branches will increase inconvenience for the elderly and other digitally marginalized.

The FSS said it would actively support efforts by banks to share their branches to minimize these inconveniences.