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Banks in Japan shifting to ATM-based transactions amid move to avoid touching cash

A high-performance ATM, left, is seen at Sumitomo Mitsui Banking Corp.'s Chuo Rinkan branch in the city of Yamato, Kanagawa Prefecture, on Nov. 24, 2020. Transactions at the branch, whose counter operations have gone cashless, can be made by presenting a QR code to the machine. (Mainichi/Atsuo Yamaguchi)

TOKYO -- Cashless banks where deposits and withdrawals are made only through ATMs have become more prevalent in Japan, as many people today try to avoid touching cash over fears of coronavirus infection.

    The new move is also favorable for banks looking to streamline operations. At bank branches in the 1970s, bank tellers would skillfully count money when the shutters closed at 3 p.m. to check whether cash entrusted from customers was consistent with the amount on account books that kept transaction records.

    Tellers had to see that the amounts matched up completely. Novelist and former banker Go Egami, 66, reflected on his years in banking fondly, and said, "When the amount didn't match, members of sales who had returned from appointments would also join, and it was all hands on deck to recount the money."

    But daily operations at banks have changed gradually. Sumitomo Mitsui Banking Corp. opened its first branch that does not handle cash at counters in November. There at the Chuo Rinkan branch in the Kanagawa Prefecture city of Yamato, south of Tokyo, high-performance ATMs that can handle up to 900 bills at once were installed, and the act of receiving and handing over cash -- which bank tellers had been responsible for -- was completely entrusted to machines.

    Customers show their bank books and cash cards to tellers, and inform them of the nature of their transactions. They are given a slip with a printed QR code once identity verification is completed. The QR code can then be read by the high-performance ATM, and the transaction is completed when the amount of money that was reported is deposited or withdrawn from the machine. The bank hopes to attract business owners, who make sales proceeds deposits that exceed regular ATMs' limit.

    With the introduction of these ATMs, not only did work to conduct cash checks become unnecessary after stores closed, but overall clerical work also decreased, allowing the branch's space to become about a half that of a regular branch. A bank representative said, "Customers that visit the bank have decreased amid the pandemic." Cashless banks have the aim of lowering infection risks among bankers while also taking into consideration the current reality of few customers.

    A shift to bank counters that do not handle cash had been gradually spreading before the coronavirus pandemic emerged. Shinsei Bank has already stopped handling cash as a general principle in all 25 of its branches, and Aozora Bank will make its 19 branches for retail customers cashless by the end of fiscal 2020. Mizuho Bank has also implemented devices at some branches where customers can make cash transactions by themselves without going through a bank teller.

    Changes in banks' income composition are also behind the move to cashless systems. Banks have not been able to earn profits on interest margins due to prolonged low interest rates, and as part of cost-cutting measures they have been reducing operations at branches so that they can be handled by fewer people.

    Sumitomo Mitsui plans to transform about 300 of its some 400 domestic branches to cashless like the Chuo Rinkan branch by fiscal 2022. Branches will place emphasis on serving as a base for responding to customers' inquiries on managing assets.

    (Japanese original by Atsuo Yamaguchi, Business News Department)

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