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Worried Japanese banks finally discover small-saving customer
Fumiko Fujisaki
Tokyo, Jan 20: Japanese banks, once notoriously indifferent to the needs of the small saver, are now learning the mantra chanted by businesses in other parts of the world: The customer is king.The banks' moment of recognition comes as foreign financial institutions begin to encroach on their once-protected turf.With the first step of the "Big Bang" financial deregulation scheduled to start in April, banks are starting to worry that the ease with which they had once collected deposits may soon evaporate. The prize for winning depositor loyalty is not small. Japan sits on the world's largest pool of savings -- 1,200 trillion yen ($9.17 trillion). It is estimated by the ministry of finance to be about a third of the world's total. "In the past, individual depositors were not considered customers," said Sawako Takeuchi, a senior economist at LTCB Research Institute, alluding to the banks' predilection for favouring big corporate clients. Not any more. With interest rates at all-time lows and confidence in
the financial system ebbing, banks have found they need to offer services, some of which have been available for decades in the United States and Europe, to lure customers to their branches."When markets were regulated, the banks only had to do what the other banks were doing," said an official of Sanwa Bank's retail banking section, who asked not to be named. "But now, banks have to appeal to customers by offering better services." Western banks have already helped to push Japan's money centre banks, known as "city banks", towards change.In 1993, the Japanese operations of Citibank, whose headquarters are in the US, began offering 24-hour automated telling machine services. The move helped it win a loyal, if relatively small, customer base. It also drew deposits. Five years later, some of the biggest banks are finally recognising the advantages of offering 24-hour service and making their first foray into electronic banking. Sumitomo Bank will start 24-hour ATM services at about 10 branches in February
and later in the year, Sanwa Bank will offer similar services at some of its branches.The slow pace of the changes baffles Tokyo-based Westerners, who are long accustomed to the ease of round-the-clock banking in their home countries. "It's stupid. Many machines are closed even on Sunday. Sunday is a big shopping day," grumbles Simon James, a British artist who has lived in Tokyo for three years. "In London, cash machines are open 24 hours."In June last year, Sumitomo and Sanwa began offering account management services for customers with touch-tone phones, services many Americans and Europeans have had for years. Other big banks have followed the lead.Sumitomo has taken electronic banking one step further offering account balance transfers over the Internet. Analysts and bank officials say the changes will come with a cost. Like banks in the US and Europe, depositors will likely have to maintain minimum balances.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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