The development of digital banking is reshaping the banking industry at a fast pace.
These days, face-to-face banking is being rapidly replaced by micro-payments using free mobile messengers as well as Internet banking and smart phone-based mobile banking. Information technology, which was a tool of finance, is now leading the development of banks in the new chapter of the industry.
Commercial banks are increasing the number of their one-man branches for closer contact with customers. For example, Hana Bank is planning to apply a tablet branch model to all of its branches before the end of this year, and Woori Bank is going to increase the number of IT devices for portable branches to 60.
At the same time, approximately 200 offline branches are expected to be shut down this year, with the ratio of online banking reaching 90 percent of overall transactions. Six major banks removed 20 percent of their ATMs for the last five years, until the end of March this year. Instead, more and more banks are open on holidays. Woori Bank CEO Lee Soon-woo recently ordered his employees to work on weekends.
Banks are also providing against non-banking companies’ penetration of the market. In the United States, financial tech ventures such as Bluebird and Simple are emerging rapidly as alternative banks. Hana Bank has recently held hands with Alipay, a Chinese IT company.
“An increasing number of banks are paying attention to promising financial tech ventures, and it seems that the advent of Internet banks with no branch is around the corner,” a bank president remarked.