Japanese Banking Industry is in crisis

Japanese Banking Industry is in crisis

...they will layoff 19.000 employees in the next 10 years and turn their branches into smart offices. In total, around 32.000 people soon will lose their jobs.

Welcome to our bank’ - this is the most common line you’ll hear from the receptionists of Mizuho Bank, Japan. While at other banks, customers have to struggle with the procedures of the bank; Mizuho bank have employees always follow their customers through step by step in order to help them complete the procedures as quick as possible. However, Japanese banks are planning on cutting staffs. It’s doesn’t mean that they lower their service quality standards, the development of technologies make the service of those employees no longer needed. Nowadays, Japanese can just fill out the form on computers at the bank branches and withdraw money from ATM booths. People can transfer money without go to the bank by using internet banking.

 


Recently, 3 largest bank in Japan announced that they will close several of their bank branches and fire thousands of employees after they updated more ATM booths and set up automatic systems that help receive customer informations. This is a shocking news for the entire Japanese labor market because the Japanese tend to work for 1 company for entire life.


As the plant, Mitsubishi will turn 100/516 of their branches into automatic bank system.


Rival of Mitsubishi bank is Mizuho bank also announced that they will layoff 19.000 employees in the next 10 years and turn their branches into smart offices. In total, around 32.000 people soon will lose their jobs.

 


Nevertheless, many experts still believe that the Japanese banking industry has not changed fast enough to catch up with the trend. Even a senior manager of the Japanese banking industry has said that they are experiencing a "silent crisis".


Japanese labor culture has made it difficult for banks to lay off workers, especially when Prime Minister Shinzo Abe's government doesn’t want their unemployment rate to go up.


Raymond Spencer, deputy director of Moody Investors Service, a Japanese subsidiary, said the industry now needs to be as flexible as a convenience store, 8 hours per day are not enough.


At Japanese largest bank, Mitsubishi, number of customer that go to bank branches have dropped 40% in the past 10 years, while online banking users have risen 40% in the past five years. The economic slowdown and low interest rates are part of the reasons for less people want to go to the bank. In addition, the rapid aging of the population will also reduce the proportion of customers go to branches in the future.

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