Key facts
- Fintech experts are advising Taiwanese banks to trim their branch networks.
- High office rents are a significant factor in the recommendation.
- Widespread adoption of online banking has decreased the necessity for physical branches.
Fintech experts are advising Taiwanese banks to re-evaluate the economic viability of their extensive branch networks, particularly as office rental costs reach new highs. The suggestion comes amid widespread adoption of online banking, which has reduced the need for physical branches.
While the primary focus of the report is on the current business trends and the economic rationale for reducing bank branches in Taiwan due to high office rents, a separate source from November 24, 2001, discusses the Ministry of Finance's plans to allow Taiwanese banks to open branches or subsidiaries in China. This older report quotes James Huang, vice president at Accenture Co, who supported the move as a way to increase competitiveness and prepare for increased competition from foreign banks after Taiwan's entry into the WTO. The 2001 report also notes that jurisdiction issues and the lack of RMB business in China were hurdles to be overcome.
A third source, dated September 17, discusses recommendations made by Lai Cheng-I, honorary chairman of the General Chamber of Commerce of the Republic of China, regarding the easing of selective credit controls by the Central Bank of Taiwan. These recommendations focus on the housing market, including adjusting luxury home thresholds and relaxing mortgage restrictions, and do not directly relate to the current advice for banks to trim branches.