TOKYO -- Mitsubishi UFJ Financial Group, Japan's largest financial group, will automate 9,500 clerical jobs in Japan, accounting for about 30% of positions nationwide at its main subsidiary, Bank of Tokyo-Mitsubishi UFJ.
President Nobuyuki Hirano made the announcement in a speech at Fin/Sum Week 2017 in Tokyo, a forum sponsored by the Financial Services Agency, Nikkei Inc. and the Fintech Association of Japan.
Hirano said managers in the financial industry are under pressure to reduce their staffing, given the long-term sluggishness of the global economy. They are also feeling squeezed by tighter financial regulations. He said MUFG needs to substantially streamline its operations through managerial reforms using digital technology. He also stressed the need to promote technological improvements and streamlining at the same time.
In May, MUFG created a chief digital transformation officer position to advance its digital strategy. The company hopes digitization will boost its profit by 200 billion yen ($1.79 billion) over the next seven years. Hirano said two-thirds of that will come from streamlining business processes.
Despite a shrinking national workforce, Japanese megabanks have continued to hire more than 1,000 new graduates every year. MUFG's move to slash payrolls is thus a bet on improved productivity. Hirano emphasized that the company will move employees who have been engaged in relatively simple work into more creative roles through retraining and other measures.
He said banks will also need to improve productivity by drawing a clear line between work that humans do and work that can be performed by machines.
Earlier this month, Kanetsugu Mike, president and CEO of the Bank of Tokyo-Mitsubishi UFJ, said the lender will promote automation by introducing artificial intelligence and other measures. If mortgage approval is fully automated, for example, it would eliminate 2,500 working hours per year, the bank said.
However, it will not be easy to retrain employees who were hired for specific tasks for other duties. MUFG will have to work carefully to ensure that people made redundant through digitization are put to good use.