Banks Reduce Branches but Focus on Senior Asset Management

Despite a reduction in face-to-face banking services impacting financial accessibility for seniors, banks are intensifying efforts to attract their assets. By transferring pension accounts, seniors can receive preferential interest rates, cashback offers, and even free enrollment in financial crime compensation insurance.

According to the financial sector on November 4, major commercial banks are targeting senior customers by offering benefits based on age and pension status. They are not only increasing interest rates on savings accounts but also bundling services like checking accounts, loans, and fee waivers to encourage everyday banking transactions.

While the number of physical branches has decreased, the proportion of elderly customers among bank clients has grown. The four largest banks in Seoul saw their branch count drop from 1,447 at the end of 2019 to 1,037 by June this year, a decline of 28.3%. In contrast, the share of customers aged 65 and older at the five largest banks—KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup—rose from an average of 14.58% at the end of 2021 to 20.34% by the end of September this year. This means that one in five customers at these banks is now 65 or older.

Banks are particularly focused on pension accounts. Securing accounts that receive monthly pension payments allows banks to attract customers for daily transactions like bill payments and savings, while also potentially gaining long-term asset management clients. According to the National Data Agency's '2025 Household Financial Welfare Survey,' the average assets of households headed by individuals aged 65 and older increased by 5.35% year-on-year to 542.72 million won.

KB Kookmin Bank offers preferential interest rates of up to 3.7% for 12-month deposits for pension recipients. Woori Bank provides a maximum interest rate of 3% on pension accounts along with fee waivers, while NH Nonghyup Bank ties pension deposit performance to preferential savings conditions. Hana Bank offers cashback and free enrollment in cyber financial crime compensation insurance for new customers receiving public pensions in their bank accounts.

While banks provide incentives for customers transferring their pension accounts, the burden of traveling further due to branch closures falls on the customers. In Dobong-dong, after a Shinhan Bank branch was converted into a digital lounge, customers must walk about 20 minutes to reach the nearest branch for in-person consultations. The number of on-site managers at the digital lounge has also decreased from two to one this fall.

A Shinhan Bank representative stated, "After five years of operating the digital lounge, we believe it has stabilized, which is why we adjusted the number of on-site managers. However, we will diversify the functions of the digital lounge to create an environment where senior customers can easily and conveniently handle their financial tasks."

When consolidating branches, banks must consider the actual travel time for customers rather than just the distance on a map. If digital branches are to serve as alternative locations, banks should also evaluate what services existing customers can access there. Jo Dong-geun, an emeritus professor of economics at Myongji University, noted, "As the number of branches decreases, those with limited financial access may feel isolated, akin to being on an island. When reducing branches, transportation conditions, such as nearby bus stops, should be taken into account."