Hippo Bank ATM That Eats Money … Carvin Makes Money With This Financial Radar

With the rise of non-face-to-face mobile transactions, commercial bank automated teller machines (ATMs) have become money-eating hippos. The monthly maintenance cost is only 5 billion won, but the demand is falling dramatically.

On the other hand, Internet banks are rapidly increasing subscriber numbers through aggressive ATM fee waiver policies. There is a joke that goes: “The banks do the tricks and the Internet banks take the money.”

According to the Electronic Disclosure System of the Financial Supervision Service on the 3rd, as of the third quarter of this year, the number of ATMs of the four major commercial banks including Shinhan, Kookmin, Hana and Woori, was 2,452. Compared to the same period last year, there were 1,488 fewer in one year. Around 800 units have disappeared this year alone. This means that an average of three ATMs are knocked down every day.

The reason banks are ditching ATMs is because of excessive operating costs. The cost of an ATM is around 5 million won per unit, but adding software and installing a booth costs 10 million won per unit. Kookmin Bank, which has 6,400 ATMs, spent 64 billion won on installing ATMs alone.

Even after installation, monthly insurance premiums, cashier services, and service fees paid to security companies cost around 1.2 million won per unit. Even Hana Bank, which has the fewest ATMs among the top four banks, spends 4.5 billion won on ATM operating expenses every month. That’s why banknotes call ATMs a money-eating hippo.

Photo = Yonhap News

However, it is impossible to get rid of ATMs at will. This is because the government has slowed down the demolition of ATMs due to concerns about diminishing financial accessibility for economically disadvantaged people, such as the elderly. As banks slashed ATMs, the Financial Supervision Service began considering stricter regulations, including closing branches. In addition, the Financial Services Commission and the Bank of Korea announced last month that they will create a database (DB) to understand the status of ATMs in all banks. In fact, it is interpreted as a warning that prevents the demolition of ATMs.

On the other hand, Kakao Bank is actively using ATM services. Kakao Bank, an Internet bank, does not have direct-operating ATMs. Kakao Bank, launched in 2017, paid a total of 120 billion won to other banks as ATM fees through September. It’s worth 39 billion won this year alone. Pays an ATM fee of more than 4 billion won per month.

However, the number of subscribers is increasing rapidly due to the aggressive fee waiver policy of ATMs. Kakao Bank’s subscribers increased from 4.93 million at the end of 2017 to 7.69 million at the end of 2018. At the end of last year, it jumped to 11.28 million. At the end of September this year, the number of subscribers increased to 13.43 million. Kakao Bank announced the day before that it would extend the ATM exemption until next June.

A commercial bank official said: “The ATM fee waiver is a good marketing case that brings practical benefits to consumers.”

Yoon Jin-woo, Hankyung.com reporter [email protected]

Ⓒ Hankyung.com prohibits unauthorized reproduction and redistribution