Stores and ATMs Disappear, but the Only Thing Increasing Is 'This' [1mm Financial Talk]

Not only bank branches but also automated teller machines (ATMs) are decreasing, while the number of 'video terminals'?the only type of automated device?is increasing, drawing attention.

Woori Bank's Senior Plus Branch No. 2, designed for seniors unfamiliar with internet and mobile financial transactions, has opened in Yeongdeungpo, Seoul. An employee is demonstrating the expert video consultation equipment installed at the branch. Photo by Huh Younghan younghan@

According to the financial sector on the 16th, as of the end of June, the number of video terminals installed among automated devices at the five major domestic commercial banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) was counted at 616 units. This is slightly more than six times the 96 units recorded five years ago in 2019. Video terminals refer to video consultation counters (digital desks) recently introduced by banks.

During the same period, not only branches but most automated devices showed a declining trend. The number of branches (including offices and sub-branches) of the five major banks decreased by 16.28%, from 4,682 to 3,920. For ATMs, the number dropped by 27.46%, from 28,148 to 20,419. The main reasons are banks reducing branches in line with the trend toward non-face-to-face financial transactions and the decreased demand for ATMs due to reduced cash transactions.

While branches themselves and other automated devices like ATMs are shrinking, the increase in video terminals is due to the banking sector's non-face-to-face and digitalization strategies. Around the COVID-19 pandemic, as non-face-to-face financial transactions expanded, banks have been reorganizing their previously large and manpower-intensive branches into smaller, lighter digital branches.

Among commercial banks, Shinhan Bank is the most proactive in operating such digital branches. In 2021, Shinhan Bank introduced the 'Digilog Branch.' For example, financial consumers who want simple tasks such as deposits, withdrawals, and notifications can easily handle these through kiosks and digital desks. Shinhan Bank also operates a 'Digital Lounge' staffed with AI bankers. In the Digital Lounge, video consultations or simple financial transactions are possible through digital desks and smart kiosks, with the range of available services continuously expanding.

KB Kookmin Bank also operates 'KB Digital Bank,' equipped with high-function ATMs called Smart Teller Machines (STM) and dedicated video consultation counters. Woori Bank opened a 'Digital Express Branch' in 2022, a micro-branch where most transactions, including video consultations, are possible, and continues to expand it. This branch is equipped with digital desks, smart kiosks, ATMs, and other digital devices.

The range of services handled by commercial banks through video terminals and similar devices is expanding. While previously focused mainly on simple tasks such as deposits, withdrawals, and receiving credit or debit cards, the scope has recently broadened to include bill payments and loan applications. Additionally, functions are expanding to include sign language services for the disabled and specialized services for foreign workers.

Hana Financial Management Research Institute recently commented on these bank digital strategies, stating, "Digital branches vary in operating hours and types to suit the local environment, and their role is expanding to effectively replace branch services through video consultation devices and concierge staff." They added, "In the past, these were experimental or operated as substitutes for branch closures, but now more than 80% of branch counter services are handled through a combination of video consultation non-face-to-face counters and smart kiosks, and the types of these services are diversifying."