Japan megabanks fighting stodgy corporate culture as new fintech players encroach
TOKYO -- "I spent dozens of hours just to produce a document that board members would not pay much attention to. It was not exciting," recalled a man in his 30s working for a consultant in Tokyo, about his 10 years or so working at a major bank.
Graduating from a top national university, he joined the bank hoping to help grow companies beneficial to society. Much of what he ended up doing, however, was paperwork, including putting together reports on next generation systems. He does not regret his decision to throw away the stability of the bank and move to his current job.
A 40-something employee in the corporate sales section of a bank complained, "Every action requires a superior's approval, and there is too much work that is simply unnecessary."
Both young and veteran employees share their critical view about the negative elements of banks -- huge loads of paperwork, an unthinking focus on following precedents, and a vertical organizational structure dictated by seniority.
This reality, however, is being cracked by outside pressure: entry into the finance industry of information technology companies with an attractive brand and a large user base. Faced with the looming fear of losing customers to the newcomers, banks "would get rid of employees whose only skill is to get the seals of approval of their superiors," said Kyoto University professor Naoyuki Iwashita, a specialist in financial technologies.
Three Japanese megabanks are introducing robotic process automation (RPA) to handle relatively simple clerical tasks with computers. Sumitomo Mitsui Financial Group Inc. intends to utilize RPA to cut workloads by the equivalent of 4,000 employees in the next three years. President and group CEO Tsuyoshi Kunibe explains that the innovation is designed "to make employees feel their worth by releasing them from monotonous jobs so that they can commit themselves to challenges of higher dimensions."
The banks opened departments to head up new business development in locations such as the Shibuya and Minato wards of Tokyo, away from their headquarters. This was an attempt to change their employees' mindsets through exchanges with operators of "fintech" ventures merging financial businesses with IT.
With these changes comes a shift in the types of employees those massive financial institutions are seeking. "We want to see un-Mizuho-like people," declared the front of a Mizuho Financial Group Inc. recruitment pamphlet prepared this past spring targeting job-hunting students. The pamphlet is geared to attract "oddballs" unlike former candidates for banking jobs, including science majors with knowledge of artificial intelligence (AI).
Banks' profits from traditional lending operations have shrunk amid extremely low interest rates, and those financial institutions need new ideas. Kenta Hioki at the global human resource operations department of Mizuho FG explained, "Creativity is necessary to produce new businesses. People seeking stability and higher pay or who are negative about change should not apply to us."
Rapid changes, however, make some students think that banks are uncertain about the future and are unstable. According to a ranking of potential employers popular among students put together this spring by Mainavi Corp., a major job placement service provider, MUFG Bank Ltd. placed 11th, down from the 4th last year. No bank was among the top 10 for the first time in 13 years.
At a job study event organized by Recruit Co. in the city of Saitama north of Tokyo in July, some among a group of students raised their hands hesitantly when a Resona Bank Ltd. human resources officer asked if they thought banks did not have a promising future. A 20-year-old student from Tokyo said, "I think they offer jobs with responsibilities that make us feel we are doing something important. But to be honest, I do feel worried when I hear about their plans to cut personnel."
Current and future employees need to adapt to changes.
(Japanese original by Business News Department financial news team)
This is Part 2 of a series.