Japan's megabanks are planning to make huge, long-term cuts to their workforces as they increasingly turn to artificial intelligence (AI) and automation in a bid to streamline operations and cut costs.
Leading the way is Mizuho Bank which reportedly plans to slash a third of its global workforce, 19,000 jobs in all, over the next ten years, according to Japanese media. Automation and greater use of AI and robots will be used to replace the absent staff. It already employs a robot in some of its branches to advise customers on asset management queries.
In addition, Japan's biggest bank, Mitsubishi UFJ Financial Group, announced in September that it intends to automate 9,500 clerical jobs at its largest subsidiary Bank of Tokyo-Mitsubishi UFJ, equivalent to a third of the workforce, as part of its operational streamlining.
Meanwhile the third of the so-called megabanks, Sumitomo Mitsui Financial Group, has opened a number of paperless branches which it plans to roll-out nationwide within three years. It also plans to use robots to perform some of its internal administrative tasks in a restructuring expected to cut more than $1.2bn from its annual expenses.
In all, the three banks are expected to cut around 33,000 jobs over the next ten years, according to a report from the Singapore-based Straits Times.
While fintech startups and AI services are as prominent in Tokyo as they are in other financial centres, Japan faces some particularly acute economic and demographic challenges in its banking sector.
The large banks are heavily staffed as a result of agressive hiring before Japan's economic crash. At the same time, the country has an ageing and shrinking popualtion, and a negative interest rate policy, both of which have combined to shrink the size of Japan's lending market and to eat into banks' profits.
It also lead the central bank, the Bank of Japan, to conclude in a recent report that "the number of financial institutions' employees and the number of branches may be in excess (oversupply) relative to demand".