Four Major Banks' Joint ATM Under Test... Could It Be an Alternative to Branch Closures?

[Image source=Yonhap News]

[Asia Economy Reporter Park Sun-mi] The banking sector is closely monitoring the effects of the joint automated teller machine (ATM) operation by the four major banks, which began last week. If the joint ATM performs well, it can be actively used as an alternative to bank branch closures while reducing costs compared to operating ATMs individually.

The four major banks?KB Kookmin, Shinhan, Hana, and Woori?started a pilot operation of joint ATMs on the 4th. Through the joint ATMs, the four banks provide services that allow customers to perform deposits, withdrawals, and account transfers collectively. Customers using the joint ATMs receive the same fee benefits as if they were using their own bank’s ATMs.

Currently, the joint ATMs of the four major banks can only be found at four Emart branches (Hanam, Namyangju Jinjeop, Dongtan, and Gwangju Gwangsan). These locations previously had individual ATMs from the four major commercial banks. The joint ATMs are operated by each bank in charge of the respective branch: Kookmin Bank manages the Hanam branch, Shinhan Bank the Jinjeop branch, Woori Bank the Dongtan branch, and Hana Bank the Gwangsan branch.

An official from one bank said, "The banking sector is closely watching the results of the joint ATM operation," adding, "From the banks’ perspective, it is an opportunity to address the side effects of branch closures while reducing the costs of ATM operation." He also noted, "If the pilot phase shows good results, there will likely be an expansion of joint ATM installations," and "It could become the starting point for branch consolidation."

Banks have been reducing the number of ATMs due to worsening profitability. As of the first quarter, the four banks collectively owned 21,247 ATMs, which is 1,116 fewer than in the first quarter of last year. However, as banks accelerate branch closures for management rationalization, there is an urgent need to either expand ATMs again or find alternatives such as branch partnerships.

However, although the banking sector has started operating joint ATMs, it has been pointed out that customers cannot use all the ATM services they previously used on the joint ATMs. For example, at the Emart Hanam branch joint ATM managed by KB Kookmin Bank, passbook transactions (passbook updating, passbook withdrawals) for other banks are not possible. Since the joint ATM’s operating software does not integrate the software of the four banks but only the hardware, some services such as passbook transactions for other banks are unavailable.