Lenders reducing workforce amid digital transformation

By Lee Min-hyung

Woori Bank and KEB Hana Bank are encouraging employees in their 50s to consider voluntary retirement, as the rise of digital banking and shift away from face-to-face transactions reduce personnel demands, according to the banks and industry officials.

The two banks are two of the nation's top five lenders. The major lenders, however, were not free from the banking paradigm shift represented by mobile banking.

For six days from Dec. 13, Woori Bank received voluntary retirement applications from employees born in 1964 and 1965. For those born in 1964, the bank offered a special severance pay equal to 30 months of their average monthly salary.

To encourage more employees to join the program, the bank also proposed to provide the target age group with medical check-ups and travel packages.

Hana also ran a similar program for the same age group. If employees born in 1964 apply, the lender offered to provide them with a special salary on par with 22 months of their average monthly income.

The lenders did not share how many employees in the age category applied for voluntary retirement.

“Robots and mobile platforms are rapidly replacing traditional banking work done by human beings,” an industry source said.

“You can send and receive money with your smartphone around the clock without having to visit a bank. The more people jump on the mobile bandwagon, the less sales offices will operate services in real world.”

In November, NH NongHyup Bank also received applications for retirement among those aged over 56 and those in their 40s who had worked at the bank for more than a decade.

A total of 370 employees will leave the bank as of Dec. 31 under the voluntary retirement program. Those over 56 will receive 28 months of salary as a special severance pay. Those aged between 40 and 55 will be given 20 months of their monthly salary.

KB Kookmin Bank and Shinhan Bank will also announce their plans to receive applications for voluntary retirement in the near future.