Workforce Restructuring Alongside Financial Branch Mergers... Card Recruiters Fall Below 10,000 for the First Time

Trend of Significant Hidden Workforce Reduction Alongside Financial Institution Branch Slimming
Overall Sales Organization Decline Across Banks, Insurance, and Cards
Number of Card Recruiters Halved from 20,000 in 2017 to Below 10,000 for the First Time in Three Years
Life Insurance Agents Also Sharply Decreasing

[Asia Economy Reporter Ki Ha-young] As financial companies accelerate the consolidation and closure of branches, their sales organizations are also shrinking. Although the closure of financial branches has become a trend due to declining customer usage rates and difficulties in bearing building rents and various management costs, this year, in particular, the novel coronavirus disease (COVID-19) has had a considerable impact. With a massive shift to non-face-to-face channels such as online and mobile, industries where face-to-face sales became difficult inevitably faced restructuring of their sales organizations.

According to the industry on the 5th, as of the end of October, the number of credit card solicitors for seven specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, and Hana Card) was counted at 9,593. This is the first time since statistics began in 2013 that the number of solicitors has fallen below the 10,000 mark. After breaking the 20,000 mark in 2017, half of them disappeared within three years.

In particular, the decline in the number of card solicitors has accelerated since the second half of the year. From July to the end of last month, 2,110 people quit their jobs. Compared to the total decrease of 1,225 solicitors last year compared to the previous year, this year has already shrunk to nearly twice that of last year. The reduction in the number of solicitors was largely influenced by the increase in non-face-to-face issuance and cost-cutting due to the deterioration of card companies' profitability. The number of solicitors, which reached 22,872 in 2016, decreased to 16,658 in 2017, 12,607 in 2018, and 11,382 in 2019.

The industry interprets that although the expansion of non-face-to-face channels had an impact, COVID-19 accelerated the reduction of card solicitors this year. Due to COVID-19, people have been reluctant to have face-to-face contact, making it difficult to conduct sales activities in multi-use facilities such as department stores and large marts.

Branch Reduction and Activation of Non-Face-to-Face Sales Lead to Sales Organization Restructuring... Direct Hit from COVID-19

This situation is similar in other financial sectors. In particular, the number of life insurance agents, which have a high proportion of face-to-face sales, has significantly decreased. According to the Financial Supervisory Service's Financial Statistics Information System, as of the first half of this year, the number of exclusive agents affiliated with specific life insurance companies was 94,369, a 19.6% (22,942) decrease from 117,311 at the end of 2015. A considerable number of insurance agents rely on additional sales through managing existing policyholders or recruiting acquaintances. Accordingly, as the point of contact for accessing and subscribing to insurance information shifts from face-to-face to non-face-to-face due to the expansion of online and mobile consumption, the industry expects the trend of decreasing agents to accelerate further.

Major commercial banks are also experiencing a reduction in bank employees due to branch consolidation. According to the 'Status of Branch Consolidation of Four Major Commercial Banks' recently submitted by Bae Jin-gyo, a member of the National Assembly's Political Affairs Committee from the Justice Party, to the Financial Supervisory Service, amid the nationwide trend of branch reduction, the number of bank employees decreased by 7,570 from 66,865 in 2015 to 59,295 as of the end of August this year. Lee Dae-gi, a research fellow at the Korea Institute of Finance, analyzed, "It is premature to conclude that branch closures directly lead to employment reductions, but a common phenomenon in the banking sector is maintaining existing employment through personnel redeployment to headquarters and new businesses while reducing new hires."

This content was produced with the assistance of AI translation services.