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.
Number of bank branches in Korea lower than OECD average
By Anna J. Park
Banks respond to decreasing trend with innovation in branch operation
By Anna J. Park
The number of commercial bank branches in Korea turns out to be lower than the average in the OECD member countries.
According to the Financial Services Commission (FSC) on Sunday, the number of commercial bank branches in Korea per 100,000 adults stood at 14.4 in 2020, which is lower than 18.3, the average number per 100,000 adults in the OECD member countries.
Specifically, the number is significantly lower than Japan's 33.9 branches per 100,000 adults and the U.S., which has 29.7 branches per 100,000 people. The number of commercial bank branches in Korea compared to the population is similar to the U.K.'s 14.5 and Sweden's 13.8 in 2020.
However, when the figure includes other non-banking financial institutions like the Korea Post and mutual finances, the number of banking branches in Korea per 100,000 people rises to 36.4, which is slightly higher than the U.S.' figure of 33 and Japan's figure of 35.
The number of local bank branches continued to increase before 2012, yet the trend completely changed in 2013, followed by a continual decrease. The rate of the decrease of local bank branches in Korea, which somewhat mitigated around 2018, has accelerated from 2020 due to the rise of pandemic-led online banking.
The decreasing trend is particularly evident among nationwide commercial banks, as their portion of the entire number of bank branches in Korea has fallen to 54 percent, from 60 percent in 2015.
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As of the end of 2021, the number of branches operated by 19 banks stood at 6,094, a decrease of 311 from the previous year. Shinhan Bank's year-on-year reduction was the highest, as its number of branches fell to 784 in 2021 from 859 in 2020.
While the number of regional bank branches is fast decreasing, lenders have come up with innovative styles of operation in their branch management, such as joint operation in partnership with other banks or the opening of special branches that operate on weekends.
Four major commercial banks also joined hands with the Korea Post late last week, enabling customers to use automated teller machine services at 2,482 postal offices nationwide.