24-Hour Banking? Not in Japan!
Been wondering when Japanese banks will follow the American lead and provide 24-hour ATM services? After reading this, you may decide to turn your ponderings to more likely happenstances, such as when Japanese immigration authorities will stop selling re-entry permits.by Thomas Caldwell
Ever wonder why Japanese banks don't have ATMs (automated teller machines) open 24 hours a day? A lot of people think it has to do with government regulations, coor worries about service (What if the machine breaks down when no bank employee is around?), or even energy conservation (We'd have to keep the lobby lights on all night!).
The real reason, however, has to do with the bottom line of the banks (the profit motive) as well as the way Japanese banking EDP (electronic data processing) operations function. First, the large Japanese "city banks" do everything in lockstep. By mutual understanding, they all offer virtually the exact same range of services. Customers are won not by service innovations, but through image advertising: things like who has the cutest talento on the posters in the windows, or what cartoon character appears on the passbooks. If one bank provided a service, then all the others would have to do it too (and nobody wants to be first and risk the ire of the industry).
Second, there is little or no demand. Non-Japanese love to complain about the lack of 24-hour banking facilities, but in reality most Japanese are not bothered by the lack of ATMs at night and on holidays. They just plan ahead, or else say "shoganai" ("It can't be helped.")
The third, and most important, reason is computing power. Japanese banks simply don't have the extra computing power necessary to provide 24-hour ATM usage. When it comes to using the computers to provide services, or processing the day's transactions, it is an either/or situation; Japanese banks just don't have the computing systems big enough to do both simultaneously.
The blame can be laid to poor planning. American banks have always planned their EDP operations on an assumption that customer-service functions would eventually be running 24 hours a day. The systems running in Japan today, though, were planned many years ago, before ATMs started to be commonplace. And since there is no incentive to introduce 24-hour banking (Japanese consumers typically don't complain, after all, and there is no indication that the added service would generate more profit), there is no perceived need to upgrade the systems. A day in the life of a bank
EDP management at a typical Japanese bank goes something like this: At around 7:30 or 8:00 AM, the bank's computers switch over from nighttime transaction processing to operation of the vast network of ATMs that blanket the country and the terminals used by human tellers to check balances. The ATMs typically start operating at 8:45 AM, so people on their way to the office can stop in to pick up some extra cash for the day.
The human tellers and their machines go online at 9:00 AM. During the day, the bank's system is used for inter-bank transfers, deposits, and withdrawals, which are recorded in the system as "memo deductions." As far as the bank's computer system is concerned, all transactions are unofficial until much later on in the process.
The tellers close down at 3:00 PM and start organizing all over-the-counter transactions collected during the day, which must be keyed into the system during the evening. Even with direct debiting, the number of transactions conducted on paper is still enormous, and the organizing process can take three hours or more. The keying of the day's paper transactions may not be finished until around 9:00 PM. The day's electronic transactions start being tabulated after the bank's entire ATM network is shut down at 7:00 PM.
By about 10:00, batch processing of the day's transactions begins. At least eight hours is set aside for batch processing, so that the process can be restarted if something goes wrong. There are several built-in "checkpoints" where the process stops so that the data can be checked to ensure there are no errors. When everything for one stage checks out, the next stage is allowed to begin.
It is during this time that direct debiting for the next day is processed. (The direct debiting process eats up an enormous amount of a bank's computing power.) If there is not enough money in an account to pay for the customer's gas bill or anything else set up for automatic payment, a flag is attached to the offending account, with instructions to deduct the money if it is deposited during the course of the day. The transaction is then listed as a memo deduction and processed the following night.
The whole process finishes in the early morning, usually a couple of hours before opening. If something went wrong during the night and the batch process was not completed, though, the ATMs cannot go online until it is. (This is a very rare occurrence, but not totally unknown.) Weekend nights are reserved for other processes: database cleanups, software testing... that sort of thing. Month-end processing is usually done on weekends as well. Sore wa, muzukashii....
Yes, the real answer to the question of why Japanese banks don't have 24-hour ATMs is that they don't have the computing capacity to do it. Their computers are busy with batch processing and direct debiting during the night, with no capacity to spare for something as mundane as customer convenience. More computing power would cost big bucks, and with the number of bad loans languishing on the books, coupled with the lack of any profit incentive for innovation, it isn't likely that banks will be offering 24-hour ATMs in the near future.
Citibank, as many know, is an exception to the "no-24-hour-banking" rule. Since it is an "outsider" in the Japanese banking fraternity, Citibank has been able to go its own way and offer service innovations that the lock-stepping Japanese "city banks" are unwilling or unable to introduce. Citibank is able to set up 24-hour ATMs because of the way its computer system was constructed in the mid-80s, as well as its relatively low number of customers and branches.
