Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Securities firms reduce local branches
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By Anna J. Park
By Anna J. Park
As more retail investors head for online platforms to trade stocks and financial products, major securities firms continue to reduce the number of their physical branches. The latest tendency is to integrate a few local branches into a larger regional branch, saving brokerage firms on rent payments by closing branches and providing more comprehensive services for customers at the larger branch offices.
Samsung Securities has decided to discontinue six wealth management branches, while incorporating them into a nearby larger branch next month. Specifically, the Gangdong branch will be consolidated into the Jamsil location, and the Gwanak branch will be incorporated into the Yeouido branch. Four other branches will also be absorbed into a larger branch nearby.
The brokerage arm of Samsung Group conducted a similar reduction of offices in early 2021, discontinuing 10 local branches.
Korea Investment & Securities is also streamlining its office operations, planning to close five local branches in Seoul and Gyeonggi Province at the start of next year. The closed branches' functions will be integrated into a larger branch nearby.
“The company continues to enlarge branches in higher-density population centers,” an official from Korea Investment explained.
Shinhan Financial Investment also plans to expand some of its major offline branches, while closing down others. The brokerage company reduced a total of eight branches this year, while focusing on enlarging flagship branches.
NH Investment & Securities also plans to close down its Myeong-dong branch in central Seoul, which will be incorporated into its Gwanghwamun center.
“Employees at the Myeong-dong branch will be transferred to the Gwanghwamun center. It aims to decrease inefficiency, stemming from overlapped business operations in regions that are near to one another,” an official from NH Investment said.
Brokerage companies' efforts to reduce offline channels have been continuing for years, as more than half of their customers are now using either a home trading system (HTS) or a mobile trading system (MTS) for their stock-trading transactions.
In 2020, the daily average transactions through brokerages' MTS stood at 26.6 trillion won ($21.9 billion), which is a whopping 219.6 percent jump from the previous year.
With the fast digitalization of customers' key trading platforms, the entire number of branches of 59 local securities firms was reduced to 947 as the end of the third quarter this year, which is down 34 from 981 logged at the end of last year. The numbers stood at 1,091 and 1,026 at the end of 2018 and 2019, respectively.
Market insiders see that the brokerage companies opted to raise the level and scope of services performed formerly at branch offices ― covering areas such as wealth management, pension management and taxation ― to larger flagship branches, while closing down smaller ones. The move is to increase the firms' efficiency and reduce unnecessary costs.