During the weekend, the impact of the second Internet-only bank KakaoBank was felt widely by incumbent commercial banks. The total number of customers who have opened their accounts with the new bank for the past four days since July 27 has been 826,000 (as of 3 pm on July 30), meaning that an average of 206,000 people opened accounts in a day. For the past four days, the cumulative deposit balance has been 275 billion won, with the balance of loans outstanding reaching 226 billion won.
Conventional banks are witnessing this phenomenon with trepidation. This feeling of crisis are leading the banks to getting rid of physical bank offices while improving the service quality of online transactions. Already so many banks are moving to close neighborhood branch offices and consolidate small ones. The total number of bank offices that have disappeared for the past five years has been 627, but the number will likely reach more than 400 this year alone.
The total number of bank offices as of the end of March this year was 5,141 except those established by special-purpose banks, down by 627 from the end of 2012 when the figure was 5,768. Still, they are set to eliminate 415 more locations by the end of this year to make the number below the 5,000 level.