Following the decrease in branches of commercial banks, it has been revealed that the number of savings bank branches is also decreasing. The savings bank industry explains that this is an inevitable choice to enhance digital banking expansion and revenue.
According to the Financial Supervisory Service's financial statistics information system on the 2nd, the number of branches of 79 domestic savings banks was confirmed to be 262 as of the third quarter of last year, a decrease of 18 compared to the same period the previous year. The number of savings bank branches had continued to increase until 2015 but began to decline in 2016, with ▲312 in 2018 ▲305 in 2019 ▲304 in 2020 ▲294 in 2021 ▲283 in 2022 ▲276 in 2023, marking nine consecutive years of decrease.
The branch reduction phenomenon is occurring without distinction between large and small savings banks. The top savings bank, SBI Savings Bank, closed its Gangnam branch in Seoul and Jeonju branch in North Jeolla Province in January last year, and in July, it also closed its Cheongdam branch in Seoul. OK Savings Bank decided to end operations at its Jeonju branch in March and merge with its Gwangju branch.
Pepper Savings Bank, which recently conducted the industry's first voluntary retirement program, has seen its number of branches drop to just five. Sangsangin Savings Bank, which is currently under discussion for merger with OK Financial Group, has only three branches remaining. According to the Savings Bank Association, more than 20 branches have closed in the past two years, but only one new branch was opened in March 2023, the DH Savings Bank branch in Haeundae, Busan.
The background for branch reduction is the same as that of commercial banks. The business environment has become sluggish, and digital transformation has accelerated. As real estate project financing (PF) issues emerged in the second half of 2022, the savings bank sector transitioned to a deficit for the first time in nine years in 2023. The savings bank industry recorded cumulative losses of 363.6 billion won in the third quarter of last year.
At the same time, the increasing trend of non-face-to-face customers due to digital transformation is explained by the industry as an unavoidable phenomenon. The Savings Bank Association is enhancing various features by operating an integrated application called 'SB Talk Talk Plus,' which allows users to compare products and loan rates, and this year it plans to introduce a group account, a popular product from internet banks. Individual savings banks are also launching their own mobile apps to provide services.
However, as the rapidly decreasing number of bank branches has raised concerns that the elderly, who prefer face-to-face transactions, are being pushed into a financial blind spot, the savings bank industry is putting efforts into revising branch closure guidelines. According to the current guidelines, each savings bank must inform the Savings Bank Association two months before planned closures and submit consumer protection measures after the closures.
Savings banks planning to close branches are conducting campaigns for the elderly to improve financial accessibility through non-face-to-face transaction education and prevention of financial fraud. A savings bank industry official noted, "Reducing offline branches is an unavoidable choice for savings banks that must enhance stability and minimize expenses," adding, "As an alternative, we are actively responding at the headquarters level to ensure that the elderly are not marginalized in financial services."