Pandemic and online banking are pushing Japanese lenders to revamp their branches

While withdrawing or transferring money through a bank teller may already seem old-fashioned, it could completely disappear in Japan within a few years, as banks revamp their branches to accommodate the digital age.

With a changing business environment resulting from ultra-low interest rates prompting the country’s banks to rethink their strategies – and with online money transactions becoming more secure and convenient than ever amid the pandemic – their outlets physical are starting to take on a different look, focusing more on consulting services rather than traditional transactions.

On Tuesday, Sumitomo Mitsui Banking Corp., one of the country’s three mega-banks, unveiled a new branch that has all but eliminated cash transaction services by bank tellers.

“In principle, our employees do not handle cash, so they can spend more time providing consulting services to clients,” said Jun Izumi, general manager of the bank’s distribution strategy department, which oversees local branch strategies.

The Chuorinkan branch in Yamato City, Kanagawa Prefecture, is Sumitomo Mitsui’s first outlet.

It still has a teller machine for bank tellers, but after accepting transaction requests, staff members can only hand out QR codes to customers. Customers can then scan the code at an ATM to withdraw or deposit money.

Sumitomo Mitsui plans to end cashier cash exchange services at 300 branches, or about 70% of its national outlets, by the end of fiscal 2022.

The new system can be difficult for older customers unfamiliar with QR codes, but bank employees will still offer in-person assistance if needed, he said.

Sumitomo Mitsui also hopes to reduce staff at the outlets by making the operation more efficient. Its local branches usually consist of two departments, but Izumi said the Chuorinkan branch only has one.

“We are trying to form a system that will be able to meet the needs of customers with a smaller number of people,” he said, although he declined to disclose an efficiency improvement estimate. of the Chuorinkan outlet compared to other conventional branches since the the bank is still testing such aspects.

Cashiers at the Chuorinkan branch of Sumitomo Mitsui Bank in Yamato, Kanagawa Prefecture, will no longer process cash directly and instead use QR codes. | KAZUAKI NAGATA

To reduce the risk of infection and keep the branch from being overcrowded, clients don’t have to wait and wait with an email notification service that lets them know when it’s their turn.

Sumitomo Mitsui has been considering an overhaul of its outlets for some time, but the COVID-19 pandemic has forced it to speed things up, Izumi admitted.

Another mega-bank, Mizuho Bank Ltd., also launched a new type of branch in Kawasaki earlier this month, focusing more on consulting services.

The renovated Musashi Kosugi outlet has doubled the space and increased the number of employees available for consulting services by almost 30%.

While its employees still process cash transactions, the bank has set up 14 tablet computers for customers to request for procedures, including opening an account and transferring money, instead of asking them. fill out papers and stamp them with a hanko seal.

The bank said it plans to cut the amount of paper used in the branch by about half.

Previously, local branches handled many customers who wanted to transact, but online banking allowed them to do so from the comfort of their own homes. Because of this, more and more people are turning to banks to seek financial planning advice, a spokeswoman for Mizuho Bank said.

Mizuho aims to transform all of its branches into consultation-oriented outlets with increased use of digital tools by fiscal 2024.

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