At present, there are no authoritative statistical reports on the annual number of layoffs in the global financial industry and the number of branches closed.
According to the Korean Herald website, on Sunday, the Korea Financial Supervisory Authority issued a report on the banking industry in the country. According to the report, the total number of employees in South Korea’s banking industry was 111,000 last year, which was a decrease of 3,602 from last year.
This scale of layoffs has set a record for the past 20 years. In 2000, South Korea’s banking sector saw large-scale layoffs, reducing 5202 posts.
By contrast, in 2015 Korea's banking sector was reduced by 1890, and in 2016 it was 2248.
Industry executives pointed out that the decrease in the employment of the Korean banking industry was mainly due to the restructuring of the major five major banks. For example, South Korea’s KB Kookmin Bank reduced 2,592 posts last year.
With the layoffs, it was the large-scale closure of banking branches. By the end of last year, the Korean banking industry had established a total of 6,790 branches, which was 312 fewer than the previous year. This was also the largest reduction in 1999.
For example, Citibank once had 133 branches at the highest level and it has been reduced to 44 by the end of last year. KB Kookmin closed 71 branches last year.
Industry sources pointed out that consumers are using Internet financial services, and that they can use smart phones to complete financial services that had previously been required to be completed by branch offices. Therefore, the South Korean banking industry has closed its branches and the trend of layoffs will continue.
Statistics from Korean banks show that in the fourth quarter of last year, Internet banking transactions accounted for 83.9% of the total volume of transactions in Korea, compared with only 10.1% of bank counter transactions.
Mobile financial services replace bank counter services. This phenomenon has occurred in various parts of the world. For example, in the Chinese market, almost all banks have introduced mobile phone software. Users can view transaction records after the user logs in, deposit balances, and can also transfer money. Operation, consumers can also conduct online financial management, purchase of funds and other products.
In addition, the Commercial Bank also launched a mobile phone free transfer service, which further encourages consumers to use Internet financial services instead of lining up to the bank online shop.
In fact, in addition to the services of the traditional banking industry going to the Internet, a large number of emerging Internet finance companies have appeared outside the banks. They provide a wealth of online services, such as mobile payments, online banking, insurance, consumer loans, micro loans. And so on, these Internet companies erode the traditional banking business, and also make traditional banks start large-scale layoffs and close branches.
It is worth mentioning that, from a global perspective, Internet finance, mobile payment, etc. in South Korea, China, Japan, and other East Asian countries have developed rapidly. In Europe and the United States, traditional credit card services are mature and consumer use is very convenient. Therefore, it also limits the development of mobile finance and mobile payment services.