Value context and insight. lkm@koreatimes.co.kr
Bank branch closures criticized for disregarding elderly
Members of a local consumer rights group hold a protest in front of the Financial Supervisory Service headquarters, on Yeouido, Seoul, Dec. 23. Yonhap
By Lee Kyung-min
By Lee Kyung-min
A recent decision by Shinhan Bank to scrap a plan to shutter a branch in Nowon, northern Seoul, has called into question whether the lenders are mindlessly railroading the profit-oriented, cost-cutting measure at the expense of elderly customers.
Korea's top five banks ― KB Kookmin, Shinhan, Woori, Hana and NH NongHyup ― say their collective, rapid move to drastically reduce the number of branches and install small kiosks is an inevitable and critical part of a digital transformation, a global wave of change that cannot be reversed.
But consumer rights groups representing an older, less digitally literate group of people, say lenders have little to no regard for senior citizens with limited access to smart technologies or devices, claiming that outright denial of in-person, face-to-face services makes them no less vulnerable to financial fraud such as voice-phishing.
Also coming under criticism is why Shinhan is shuttering branches in lower-income districts faster, as evidenced by the only branch in Wolgye-dong, Nowon district of northern Seoul servicing 78,000 residents being closer to being shuttered than five branches in Apgujeong, a district in southern Seoul with only 26,000 residents.
Shinhan Bank maintains that the shuttering of branches is decided by the productivity and growth prospects of each district, denying the allegation of it being a discriminatory practice.
The bank said that it has decided Tuesday to retain the Wolgye branch where two bank employees will provide in-person services.
This is a change from the previous plan whereby a kiosk was to be installed with no bank employees to service customers by February next year.
The sudden withdrawal of the plan followed a backlash from Wolgye residents who have staged a series of protests since the bank announced the plan early this month.
The elderly residents held a protest Dec. 16 in front of the bank's headquarters in Seoul. The move was joined in by a civic group that filed a petition with the Financial Supervisory Service (FSS) against the shuttering of the only branch in their district, Dec. 23.
The civic group's head, Kim Deuk-eui, said he believes the bank is disregarding Wolgye residents.
“What are they supposed to do if they need an in-person service? Should they take a bus, taxi to go to a wealthy neighborhood just to print a bank document? It is truly deplorable,” Kim said at a press conference held in front of the FSS.
The elderly have weak hearing and are not used to using digital devices, a reason why they find the unmanned kiosk-mediated services inconvenient, Kim added.
“Not all services can be provided via kiosks. Shinhan Bank is going out of its way to increase kiosks without elderly customers in mind,” he said.
The five commercial lenders have shuttered a large number of branches for digital transition and efficiency.
Data submitted by the FSS to Rep. Bae Jin-gyo of the minor opposition Justice Party showed the five banks shuttered 203 branches between January and November this year. As many as 72 branches will be shuttered by the end of the year.
Shinhan Bank closed 67 from January to October. Seven were shuttered last month and two will be by the end of this month.
Whether the Wolgye branch will slow the pace of the banks' years-long drive remains to be seen.
Financial authorities are expected to unveil measures to improve the quality of financial services for elderly customers next year, following research on the use of digital finance conducted this year.
Digital banking services made easy for an older, non-tech-savvy group of users will be included. But whether or how much the new guideline will help elderly consumers at all remains unclear, since no digital services will be able to fully replace in-person services provided by bank employees.