Online trading whittles down brokerage jobsKorean brokerage firms continue to tighten their belts, and have steadily downsized their workforces over the past three years with the emergence of new trading methods as well as an increased number of mergers and acquisitions (M&A).
Nearly 5,000 stock traders in Korea have lost their jobs in the past three years as customers turned to online trading or smartphone applications.
According to data provided by the Korea Financial Investment Association, there were 35,920 employees working for security companies as of September 2016.
Compared to September 2013, the size of the workforce shrank by 5,302 workers, or nearly 15 percent.
“Online or smartphone trading services charge lower fees than face-to-face services,” said a trader for a Korean securities company. “We partly live off the fees we receive and with more people relying on other means of investment, we are losing ground.”
Home trading systems allow individual investors to buy and sell stocks at a location of their choice as long as they have internet access and a computer without having to visit brick-and-mortar branches of securities companies.
Mobile trading systems are similar and work on smartphones.
Both these services allow individual investors to pay cheaper commissions.
“For me, I like to use a mobile trading system because I can check the earnings rate of my investment in real time on my phone without having to call a trader,” said Lee, who uses a mobile service offered by Hyundai Securities, which recently merged with KB Investment and Securities.
Another factor that has cost jobs are mergers like that of Hyundai Securities and KB Investment and Securities.
The Financial Services Commission announced its goal of creating globally competitive Korean investment banks last August after Korean firms were unable to participate in an initial public offering of Line Corporation.
Since then, Korean brokerages have been trying to bulk up their sizes to meet criteria set up by the regulatory agency, including a four-trillion won ($3.3 billion) capital base.
Since the merger, KB Investment and Securities reportedly accepted the voluntary retirement of 220 employees.
After a merger of Woori Investment and Securities and NH Investment and Securitie in 2014, as many as 750 traders lost their jobs in Yeouido, Korea’s financial and investment district, through voluntary retirements.
BY CHOI HYUNG-JO [email@example.com]