KYOTO - Demand for mobile banks, or vehicles offering an ATM, as well as over-the-counter and other financial services, is growing in Japan following a recent series of natural disasters, while high introduction costs are a challenge to their implementation.
The vehicles are increasingly important in order to keep financial service infrastructure working in disaster-hit areas, as they enable affected people to withdraw cash from in-vehicle ATMs in times of power outages, for example, and receive consultations from bank personnel aboard on how to reconstruct their lives, industry watchers say.
Kibi Shinkin Bank in the city of Soja, Okayama Prefecture, which was among areas hit by torrential rains in July, introduced a mobile bank vehicle last month.
The local lender decided on the procurement of its own mobile bank vehicle because it is expected to take time to reopen its Mabi and Kawabe branches in the heavily hit Mabicho district in the city of Kurashiki in Okayama. Previously, Kibi Shinkin had borrowed such a vehicle from another shinkin bank.
Two Kibi Shinkin employees onboard the vehicle serve customers, including by offering consultations to people affected by the rain disaster on borrowing loans to cover their daily spending.
“We hope to improve convenience” for our customers, a Kibi Shinkin official said, noting that there are many customers who are unable to go to the bank due to their old age.
Bank of Kyoto dispatched a mobile bank vehicle for two days to its Hokuso branch in the city of Kyoto, which was affected by a powerful typhoon in early September.
On top of cash withdrawal services, customers were able to charge their smartphones using a power generator loaded on the vehicle.
“We responded to customers’ need to keep their communication tools usable in times of disasters,” a Bank of Kyoto official said, referring to the smartphone charging service.
Kazuyuki Tone, a senior researcher at the Shinkin Central Bank Research Institute, said, “It’s very worthwhile for banks to secure mobile bank vehicles that offer even minimum services in the event a large-scale disaster strikes.”
According to the institute, however, only about two dozen local financial institutions, including shinkin banks, were in possession of such vehicles as of April this year.
High expenses are the biggest hurdle. Each mobile bank vehicle costs about ¥50 million ($439,000), although this is down sharply from the earlier level of some ¥100 million.
“If more banks introduce mobile bank vehicles, the prices will go down further, possibly leading even more institutions to follow suit,” Tone said.
How banks will generate profits from the vehicle-based mobile financial services is another challenge, an industry analyst said.