Our Neighborhood Flexible Stores?..."Only Unmanned Machines Have Increased"

Financial Services Commission Promised to Increase Flexible Stores in Commercial and Office Buildings
But Dropped from 113 in 2019 to 93 Last Month
Number of High-Performance Unmanned Automation Devices Increased by 60
Used More for Bank Cost Reduction Than Consumer Convenience

[Asia Economy Reporter Song Seung-seop] Although banks have increased the number of flexible branches operating outside regular business hours (weekdays from 9 a.m. to 4 p.m.), most of them are identified as digital branches without resident staff. The flexible branches in commercial and office areas, which financial authorities had announced plans to expand, are actually falling far short of their targets. Ultimately, flexible branches seem to have been utilized more as a cost-saving policy for banks rather than for their original purpose of enhancing consumer convenience.

According to the financial sector on the 3rd, as of last month, the total number of flexible branches operated by domestic banks was 872. This is an increase of 6 from 866 at the end of last year. Compared to 861 at the end of 2019, only 11 branches have been added over two years and five months.

There are five types of flexible branches: those located in government offices, specialized branches for foreign workers, branches near commercial and office areas, currency exchange centers, and high-function unmanned automated machines. Branches located in government offices were the most numerous at 440, followed by automated machines at 293. There were 93 branches near commercial and office areas, 32 specialized for foreign workers, and 14 currency exchange centers.

Financial authorities have set a policy to significantly increase flexible branches over several years. This was because they were well received among financial consumers for being accessible on weekends and at night. In April 2019, the Financial Services Commission announced a “Comprehensive Plan for Financial Consumer Protection,” planning to increase the number of flexible branches from 733 to 986 by the end of 2019, a 34.5% increase. In particular, flexible branches within commercial and office areas, which had higher accessibility to consumers than other types, were to be expanded intensively.

Flexible branches in commercial and office areas, which were supposed to increase, are declining

However, the number of flexible branches has remained below 900 for several years, falling far short of the plan. The commercial and office area branches, which were the main focus for expansion, have rather decreased. The number of flexible branches in commercial and office areas was 113 in 2019, increased by one in 2020, but has been declining since. Last year, it dropped by 9 to 105, and currently, it is below 100.

The gap has been filled by high-performance unmanned automated machines. High-performance unmanned automated machines, commonly called STM, provide services such as passbook issuance, product subscription, and inquiries in addition to the functions of financial automated teller machines (ATMs). The number of STMs installed in flexible branches increased rapidly from 233 in 2019 to 246 in 2020 and 263 in 2021. Considering that it rose to 293 last month, it increased by 60 (25.7%) in just over two years.

This has led to criticism that the financial authorities’ plan to increase flexible branches was used more for cost reduction by private banks rather than enhancing consumer convenience. Unlike flexible branches in government offices, commercial, and office areas where staff must be present, STMs can significantly reduce personnel and branch size once installed. Maintaining flexible branches while facing criticism for "ignoring financially marginalized groups and unilaterally closing branches" is relatively easier with STMs.

There are also concerns that the inconvenience for financially vulnerable groups such as the elderly and disabled, who have difficulty using digital devices, may increase. In the case of STMs, the range of services that can be performed is also limited compared to regular branches.

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