TOKYO >> To encourage more customers to go digital, Japan’s largest bank is offering customers 1,000 yen (about $9) to give up their passbooks.
In a campaign that kicked off last month, MUFG Bank will pay 100,000 customers 1,000 yen to go fully digital. The campaign runs through March 15.
While younger generations are accustomed to online banking, many elderly customers are still more comfortable using paper passbooks.
But online banking alleviates the costs of servicing paper books. The bank shoulders a nearly 200-yen annual stamp duty for each passbook account, and with 34 million customers, many of whom still use passbooks, the stamp tax means MUFG Bank must pay billions of yen each year. Additional expenses, such as ink used to record transactions, hike up costs even more.
Traditional megabanks have made going digital a top priority, as financial-technology startups and online-based banks have boosted their marketing and promotions, firing up competition.
In June, MUFG Bank, a subsidiary of Mitsubishi UFJ Financial Group Inc., began issuing passbooks only upon request.
Mitsubishi UFJ’s commitment to a digital operation is reflected in a top managerial change. The firm announced in January that Hironori Kamezawa, chief digital transformation officer, will take the helm of the company in April.
The appointment is unconventional, since Kamezawa will reportedly be the first CEO of a Japanese megabank with an educational background in the sciences. The move also represents a break in the traditional manner of climbing the corporate ladder, which has been based on seniority.