Japan’s beleaguered banks tap robotics firm to automate jobs

AS Japanese banks cut thousands of positions to streamline their operations and cope with negative interest rates, some are turning to a US startup for help.

UiPath is implementing its automation technology at the nation’s biggest banks, and a growing number of regional lenders are tapping the firm, Japan head Koichi Hasegawa said in an interview.

“We think the financial industry has the biggest need for robotic process automation,” said Hasegawa, a former chief operating officer of Barclays Plc’s Japan unit. Banks “need to free employees from manual labour that are taxing in work hours and are a mental burden.”

Known only to the tech-savvy a few years ago, robotic process automation is gaining traction at companies to perform repetitive and routine tasks. For banks like Sumitomo Mitsui Financial Group Inc, it’s a useful tool as they seek to reduce headcount through attrition and reassign staff to more productive roles.

“We needed to speed up the reallocation of our resources to create a new business model and expand profits,” said Kei Yamamoto, who led Sumitomo Mitsui’s efforts to introduce RPA in 2017.Japan’s second-largest lender has slashed more than 2 million work hours annually since the initiative began, equivalent to the labour of about 1,025 full-time employees, Yamamoto said. It is on course to cut the workloads of 1,500 people in the fiscal year ending March.

Strict labour laws in Japan make it difficult for companies to lay off workers even if their jobs have become outmoded. Transferring administrative staff to other areas such as sales isn’t necessarily an easy task, according to Nana Otsuki, chief analyst at Monex Inc.

“Not everyone is suited for such changes,” Otsuki said. “It’s fair to say it’s a tough time for bank workers.”

It’s not just banks that are turning to UiPath in Japan, where a shrinking population has led to a shortage of workers and a need for companies to improve productivity. Hasegawa said firms must also address an excess of clerical staff and a lack of specialists.

“The fundamental issue in Japan is labour mismatches,” he said.

Hasegawa set up the local unit of UiPath in February 2017 with just three employees. It now has 270.

The New York-based startup is seeking to double its Japanese corporate clients to 2,000 this year, Hasegawa said. That’s after the number tripled to more than 1,000 over the 12 months to May.

“We’ll continue investing in Japan as our top-priority market,” he said. — Bloomberg