The rapid spread of financial technology combined with steep population decline are forcing Japan's biggest banks to reshape their business models. 

Japan's mega banks are hurting with several setting out new strategies to downsize their workforce and substantial network of branches. The ubiquitous spread of fintech solutions is also a game changer for the overstaffed «job for life» institutions. 

In a report on the financial sector published last October, the Bank of Japan warned that financial institutions in the country may have an excess of employees and branches compared with demand.

Tough Decisions

With one of the lowest birthrates among advanced economies and a strict immigration policy, the population is projected to fall below 100 million by 2055. But it is not only the large banks that face tough decisions.

smaller regional banks in Japan are also being squeezed by fierce competition amid the Bank of Japan's ultra-low interest rate policy and face the same pressure to downsize and consolidate their operations «Kyodo News Agency» reports. 

Banal Banking Tasks to go

In response to the changing demographics Mitsubishi UFJ (MUFG) is aiming to cut the unit's more than 40,000-strong domestic workforce by around 6,000 by the end of 2023 and also plans to eliminate the workload equivalent of 9,500 employees by automating mundane tasks.

MUFG is also looking overseas for growth pinning its hopes on the burgeoning Indonesian middle class with its bid to acquire Bank Danamon as finews.asia first reported in November last year. 

Branch Consolidation

Japan's third largest banking organisation by assets, Mizuho Financial Group, plans to consolidate its 500 branches into 400 by fiscal 2024 and cut as many as 19,000 jobs by fiscal 2026.

Meanwhile Sumitomo Mitsui Financial, the country's fourth ranked bank group, is also undergoing branch consolidation with a promise to invest 20 billion yen over the next three years in implementing financial technology solutions