25% of Bank, Insurance, and Securities Branches Closed in 5 Years... "Severe Erosion of Financial Accessibility" [2025 National Audit]

Although Driven by the Spread of Non-Face-to-Face Transactions, Consumer Accessibility Severely Undermined
Assemblyman Heo: "Financial Companies Must Establish an Inclusive Financial System"

Over the past five years, one out of every four branches of major domestic banks, insurance companies, and securities firms has shut down, according to recent findings. While this may reflect changes driven by the spread of non-face-to-face transactions, critics argue that the pace of closures is excessively rapid, undermining financial consumers' access to services.

According to data obtained by Assemblyman Heo Young of the Democratic Party of Korea, a member of the National Assembly's Political Affairs Committee, from the Financial Supervisory Service, the four major commercial banks closed 937 branches-26% of their 3,625 total branches-between 2020 and June of this year, leaving 2,688 branches in operation as of now.

During the same period, the five leading life insurance companies closed 484 branches, accounting for 20% of their 1,959 locations, while nine major securities firms shut down 233 offices, or 36% of their 407 branches.

Assemblyman Heo pointed out, "Although some view this as an inevitable change due to the growth of non-face-to-face transactions, the pace of branch reductions by financial companies has been excessive, causing a sharp decline in financial consumers' accessibility."

In the case of banks, the trend of branch closures continued even after the Korea Federation of Banks strengthened its 'Joint Branch Closure Procedure' in March 2021. Notably, after the National Assembly's audit in 2023 raised concerns and financial authorities implemented measures to improve the branch closure process, the pace of closures temporarily slowed. However, as of September this year, 103 additional branches have closed, indicating a resurgence of the trend.

The pace of closures varied significantly by bank. Since 2023, Hana Bank reduced only one branch, while KB Kookmin Bank closed 98, Shinhan Bank 86, and Woori Bank 71. Branch closures were particularly concentrated in the Seoul metropolitan area: of the 937 branches closed nationwide over the past five years, 629-or 67%-were located in Seoul and Gyeonggi Province.

Even within the metropolitan area, polarization was evident. Of the 1,045 branches of the four major commercial banks currently operating in Seoul, 329 are concentrated in the three Gangnam districts (Gangnam, Seocho, and Songpa), accounting for 31.5% of the total. In other words, one out of every three bank branches in Seoul is located in these three districts. In contrast, closures have been frequent in middle- and low-income areas, deepening the hollowing out of financial services. Although financial authorities introduced a system to assess the proportion of elderly residents and the degree of customer inconvenience when closing branches, the actual improvement in regions with many financially vulnerable residents has been minimal.

Assemblyman Heo emphasized, "The banking sector, which earned a massive profit of 91 trillion won over the past five years, must recognize its responsibility not only for profitability but also for the public nature of financial services. All sectors of the financial industry-including insurance and securities companies-should establish an inclusive financial system that covers all regions and social groups."