ATM numbers in Korea plunge 34% in 10 years

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The number of automated teller machines (ATMs) operated by South Korea’s four major banks—KB Kookmin, Woori, Shinhan, and Hana Banks—have tumbled 34 percent over the last 10 years. The spread of online banking and advanced fintech, which has led to a rise of various transaction methods such as mobile simple payments, has greatly reduced the need for cash. But the decline in both commercial bank branches and ATMs is raising concerns about the financial exclusion of the elderly, many of whom are not familiar with fintech or online banking and feel more comfortable using cash.

According to data collected by Maeil Business Newspaper from the four major banks on Tuesday, the number of ATMs, including cash dispensers (CDs), they own dropped 34 percent to 16,287 as of September 2023 from 24,502 in 2013. This means one out of every three ATMs has disappeared at the four banks over a decade.

“Banks are reducing the number of ATMs because fewer people are using them and the cost of maintaining them is not cheap,” an official from the banking industry said. There is not much benefit in maintaining ATMs for the banks as operating one costs more than 10 million won ($7,374.63) annually even as they increasingly waive ATM fees to enhance customer service.

The decline in ATMs reflects the falling demand for cash in Korean society. Online payment systems such as taxi and express bus booking applications are penetrating every corner of the public’s lives, and cash use is falling every day.

The proportion of cash use has halved to 14.6 percent in 2021 from 34.8 percent in 2013, according to the Bank of Korea, while the share of simple payment services provided by fintech companies grew to 67.2 percent in the first half of this year, up from 60.8 percent in 2020, when data was first compiled. A BOK survey shows that mid-to-higher 80 percent of people in their 40s and younger have experienced mobile financial services.

Despite the younger generation’s ease with these services, concerns are raised that the rapid decline in the number of ATMs of commercial banks could lead to inconvenience for senior citizens, who prefer cash transactions as they are comparatively unfamiliar with online banking and various fintech technologies. Some stores still require cash payments, particularly in rural areas, and the elderly are not even sure where to find an ATM to withdraw cash.

Alongside ATMs, the number of local branches of commercial banks is also falling, which could further worsen the elderly’s financial accessibility as they are not adept at using online banking. According to data obtained from the Financial Supervisory Service by Representative Yu Eui-dong, five commercial banks, namely KB Kookmin, NongHyup, Woori, Shinhan, and Hana Banks, shut down a total of 651 branches between 2018 and July 2023.