While withdrawing or transferring cash 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 adapt to the digital age.
With a changing business environment stemming from ultralow interest rates prodding the nation’s banks to rethink their strategies — and with money transactions online becoming more safe and convenient than ever amid the pandemic — their physical outlets are starting to take on a different look, focusing more on consultation services rather than traditional transactions.
On Tuesday, Sumitomo Mitsui Banking Corp., one of the nation’s three megabanks, unveiled a new branch that has basically eliminated cash transaction services by bank tellers.
“Our employees in principle won’t handle cash, so they can use more time to provide consultation services for customers,” said Jun Izumi, general manager of the bank’s channel strategy department, which oversees local branch strategies.
The Chuorinkan branch in the city of Yamato, in Kanagawa Prefecture, is Sumitomo Mitsui’s first such outlet.
It still has a counter for bank tellers, but after accepting transaction requests staff members are only able to hand out QR codes to customers. Customers can then scan the code at an ATM to withdraw or deposit cash.
Sumitomo Mitsui plans to end cash exchange services by tellers at 300 branches, or about 70% of its domestic outlets, by the end of fiscal 2022.
The new system may be difficult for older customers not familiar with QR codes but bank staffers will still offer support in person if necessary, it said.
Sumitomo Mitsui is also hoping to reduce staff at outlets by making the operation more efficient. Its local branches usually consist of two departments, but Izumi said the Chuorinkan branch has only one.
“We are trying to form a system that will be able to meet customers’ needs with a smaller number of people,” he said, although he declined to disclose an estimate of improvement in efficiency at the Chuorinkan outlet compared to other conventional branches since the bank is still testing such aspects.
To reduce infection risks and prevent the branch from getting crowded, customers don’t have to sit around and wait thanks to an email notification service that tells them when it’s their turn.
Sumitomo Mitsui has been considering a revamp of its outlets for some time, but the COVID-19 pandemic forced it to speed things up, Izumi admitted.
Another megabank, Mizuho Bank Ltd., also rolled out a new type of branch in Kawasaki earlier this month that’s more focused on consultation services.
The renovated Musashi Kosugi outlet has doubled the space and boosted the number of employees available for consultation services by nearly 30%.
While its employees still handle cash transactions, the bank has set up 14 tablet computers for customers to request procedures, including opening an account and transferring money, instead of requiring them to fill in papers and stamp them using a hanko seal.
The bank said it expects to slash the amount of paper used at the branch by about half.
Previously, local branches dealt with many customers who wanted to make transactions, but internet banking has enabled them to do that from the comfort of their own home. Because of that, more people now come to banks to seek advice on financial planning, a spokeswoman at Mizuho Bank said.
Mizuho aims to turn all of its branches into consultation-focused outlets with increased usage of digital tools by fiscal 2024.
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