Financial institutions, whose profits are deteriorating due to low interest rates, are increasingly charging fees to manage accounts. Detailed efforts are essential to obtaining the understanding of customers.
Sumitomo Mitsui Banking Corp. (SMBC) plans to charge an annual fee of 1,100, yen including tax, on customers who open new accounts from April next year if they do not use its internet banking system and their accounts are dormant without any transactions for more than two years.
The fee will be only applied to accounts with a balance of less than 10,000 yen. Customers aged below 18 and 75 or older will be excluded. Moves to introduce similar fees have grown among regional banks and shinkin credit associations, but SMBC will be the first among the three megabanks to do so.
SMBC's plan to charge the fee is apparently aimed at reducing costs by promoting the digitization of financial services. However, as long as the bank passes the burden from declining profits on to its customers, it must use every means to explain the matter sufficiently.
A growing number of banks have also announced that they will charge fees for new customers who want to issue paper passbooks, in a bid to promote the shift to digital passbooks, through which customers can check their transactions online.
From next April, SMBC will charge such customers with paper passbooks 550 yen a year, while Mizuho Bank will start collecting 1,100 yen per passbook in January next year. Elderly people will not be subject to these fees.
In Japan, people are said to have an average of 10 bank accounts per person, and many of the accounts have been left unused. One paper passbook generally costs about 200 yen per year for such expenses as the stamp tax and printing. There may also be situations involving costly measures against money laundering.
In Western countries, it is common for banks to charge account maintenance fees.
In Japan, however, there is strong criticism that bank transfer fees are relatively high compared with these countries. Some observers point out that banks in Japan make up for the cost of maintaining accounts with transfer fees. In April this year, the Japan Fair Trade Commission compiled a report raising questions over remittance fees between banks remaining high.
If the banks charge customers for account maintenance fees, they should speed up their efforts to lower transfer fees.
If the banks urge customers to use their online services, they should also not fail to implement thorough safety measures.
Financial institutions such as Japan Post Bank and regional banks have been hit by unauthorized money withdrawals through accounts linked to NTT Docomo's e-money payment service, causing concern among customers. It is imperative to take preventive steps and establish a system to promptly compensate fraud victims.
Some people find it reassuring to check their balance in a paper passbook. It is hoped the banks will continue giving consideration to the elderly by maintaining both paper and digital services.
It is also important for the banks to use digitization for the creation of opportunities to develop new revenue sources, so that they will not have to rely on fees.
-- The original Japanese article appeared in The Yomiuri Shimbun on Oct. 19, 2020.
Read more from The Japan News at https://japannews.yomiuri.co.jp/
