Shift to online services pushes MUFG Bank to reduce number of ATMs
Online sales and cashless payments lessen the need for personal banking services such as cash withdrawals.
The growing digitalization of banking services is pushing MUFG Bank, a unit of Mitsubishi UFJ Financial Group Inc (TYO:8306) to reduce the number of ATMs. A report by the Nikkei Asian Review says MUFG Bank intends to reduce its Japanese ATM network by 20% through fiscal 2023.
The change reflects the rise in online sales and cashless payments, which lessens the need for personal banking services such as cash withdrawals. The number of MUFG Bank customers using online banking has increased by 40% over the past five years.
The newspaper reports that MUFG Bank currently operates 8,141 ATMs across Japan, and intends to cut this number to around 6,700.
The change will include reducing the number of machines at individual sites and consolidating ATM locations around train stations. However, the bank will install smaller machines and state-of-the-art models that enable users to pay their utility bills at convenient locations.
MUFG Bank also aims to make online banking more convenient. The company plans to introduce improvements, such as a digital passbook that lets users see 10 years of transactions.
MUFG Bank’s medium-term business plan through fiscal 2023 aims for halving the number of locations with traditional teller windows as the company switches to smaller branches offering more self-service options.
A similar push was announced by Singaporean bank OCBC in July this year. The bank intends to convert bank tellers into digital ambassadors and service executives. OCBC Bank expects to see half of its bank tellers upskilled to perform higher value-added financial services as it installs the latest ATMs and digital service kiosks at 35 of its branches by 2020.
OCBC Bank has allocated $14 million for the deployment of the new ATMs and digital service kiosks in Singapore. These new machines function like “mini branches” and currently allow customers to perform 15 of the most frequent bank counter services such as cash deposits, cash withdrawals above daily ATM withdrawal limits, selecting the denomination of notes withdrawn, simultaneous cash and coin deposits, updating customers’ personal details and account and card related requests. These can be performed in a completely paperless and straight-through way.
