As non-face-to-face transactions increase and the adoption of artificial intelligence (AI) in the financial sector accelerates, the number of employees at commercial banks continues to decline. The market forecasts that, considering the pace of AI transformation (AX), the number of bank branches and employees will decrease at an even faster rate.
According to the financial industry on the 20th, the number of domestic employees at Korea's commercial banks stood at 61,156 at the end of last year, a decrease of 1,123 from a year earlier.
At the end of 2019, before COVID-19, the number of commercial bank employees reached 67,167. Compared to that time, this represents a decrease of 6,011 people, a decline rate of approximately 9%. The number of bank employees temporarily increased in 2024 but has continued on a downward trend in the broader picture. An official from a commercial bank explained, "As banks have recently been competitively adopting AI in their operations, employees' roles are shrinking in areas such as tellers, loan reviews, and various back-office tasks," adding, "The pace of replacement is bound to accelerate further."
Indeed, as bank branches rapidly decrease, the places where employees can work are diminishing. According to the Korea Federation of Banks, KB Kookmin Bank, the country's largest bank, had 771 branches (branches + sub-branches) nationwide as of the end of last year, a decrease of 29 in one year. Shinhan Bank also saw 43 branches close during the same period, dropping from 693 to 650. Woori Bank shrank from 684 to 656. Among the four major commercial banks, Hana Bank increased by 6, from 602 to 608.
Similar concerns exist across the entire financial sector, including credit cards and insurance. Industry officials say there are significant concerns in the financial industry about workforce restructuring, new hiring, and personnel management due to AX. A senior official at a consulting firm said, "As AI adoption has recently expanded, cases of seeking advice on overall workforce management have been increasing," adding, "It's time for a comprehensive overhaul of organizational structures, work distribution, and employee training."
In fact, there are numerous cases where AI still fails to perform adequately in complex consultation tasks. At one internet bank aiming to be an AI-native bank, when asked about the maximum mortgage loan available for a 3 billion won apartment in Gangnam, Seoul, the AI answered 620 million won. This was an incorrect response, as apartments exceeding 2.5 billion won in market value in the metropolitan area are currently only eligible for a 200 million won loan.
That's not all. When asked about an additional mortgage loan available for someone with a home value of 2 billion won, an annual income of 60 million won, and an existing jeonse loan of 200 million won, the answer was "0 won." Although it was explained that the jeonse loan was taken with a bullet repayment method, the AI gave a wrong answer by including the principal in the Debt Service Ratio (DSR) calculation.
When asked to "recommend a card," the AI recommended three cards with the most recent applications from the "credit cards with good benefits" service. When re-asked to "recommend the card with the highest merchant discount rate," it provided the same three popular cards it had recommended previously.
