14,000 Bank ATMs Disappeared Over 6 Years... 1,000 Branches Closed

Kang Ming-guk "An Act Ignoring Publicness and Accessibility"

As bank branches decrease and even cash ATMs are rapidly withdrawn, voices are emerging that these measures do not consider financially vulnerable groups.

According to data requested by the office of Kang Ming-guk, a member of the People Power Party, from the Financial Supervisory Service on the 24th, a total of 14,426 ATMs have been withdrawn from the banking sector over approximately six years from 2018 to the end of last month. By year, 2,102 ATMs were withdrawn in 2018, 2,318 in 2019, 2,770 in 2020, 2,506 in 2021, 2,424 in 2022, 1,646 last year, and 660 until the end of last month this year.

The decline in ATMs was particularly noticeable in the metropolitan area. In Seoul and Gyeonggi, 4,468 (31%) and 2,847 (19.7%) ATMs were withdrawn respectively, totaling 7,981 (55.3%) in the metropolitan area alone. Busan also saw a decrease of 1,179 (8.2%) ATMs.

[Image source=Yonhap News]

The number of bank branches closed from 2018 to the end of last month was 1,003. The number of closed branches exceeded 200 annually from 2020 to 2022. However, last year it was 97, and this year until the end of last month, it was 43, showing a slowdown in the pace.

Considering critical public opinion, cases of downsizing branches into sub-branches instead of closing them have also increased. Over about six years from 2018 to the end of last year, a total of 321 branches were converted into sub-branches. The region with the most conversions was Seoul, where 75 branches (23.4%) were replaced by sub-branches. Sub-branches typically handle deposit and savings services as well as simple personal loans such as mortgage and credit loans.

Commercial banks' removal of ATMs or branches is interpreted as a cost-cutting measure in the process of promoting digitalization of services. For example, Shinhan Bank's average operating cost per branch was 2.45 billion KRW last year, whereas sub-branches operate without a separate budget, using the main branch's operating expenses. The operating staff is also 12.6 persons per branch but only 3.1 persons per sub-branch.

Representative Kang said, “The fact that banks continue to close branches and withdraw ATMs in large numbers even when they are not operating at a loss is a disregard for the public nature banks should uphold and the accessibility of financial consumers such as the elderly.” He added, “Financial authorities should inspect whether banks faithfully follow joint procedures for branch closures and secure financial accessibility by expanding penalty points for branch reductions when evaluating banks’ regional reinvestments and imposing disadvantages accordingly.”