JAPAN POST BANK Co., Ltd.
Promoting Administrative Collaboration with Regional Financial Institutions
- Strengthening collaboration in non-competitive areas -

One of the three cornerstones of our medium-term management plan (FY2018-FY2020) is "return of funds to the regions." This is a policy of deepening cooperation and partnership with regional financial institutions in the form of joint investments in regional revitalization funds. One of the measures we are pursuing is to jointly conduct administrative operations with regional financial institutions.

Improving administrative efficiency and reducing administrative costs are common and enduring issues for financial institutions. The project was launched with the idea of utilizing the Bank's 11 savings administration centers and other facilities nationwide as one way to jointly solve these issues. We have established a Regional Financial Institutions Department within our sales division, which serves as a central contact point for regional financial institutions and is responsible for meeting their specific needs.

When asked about the needs of regional financial institutions, we found that the keyword for office collaboration is the reduction of the processing load of paper forms. Even in the financial industry, where digitization is progressing, the investment in equipment and personnel to process paper forms and associated paperwork is a significant burden. We thought that one of the options to solve this problem would be to share the cost of common paperwork among multiple institutions through a single office center.

The concept of administrative collaboration is to share three elements: (1) centers (facilities), (2) systems and equipment, and (3) personnel (staff and contractors). Our bank has 11 savings administration centers across the country that perform bank back office operations and centralized operations, and joint operations are achieved by effectively utilizing this existing infrastructure. In the case of the joint operation of tax and public money collection, the bank's savings administration centers are responsible for the compilation, classification, and delivery of notices of receipt of revenue, public money (local taxes), and utility bills, etc., which were previously carried out at each financial institution. We are entrusted with this work by regional financial institutions, and we then re-consign the work to Primagest for processing utilizing our existing administrative processing infrastructure. Since the same office and systems (equipment) are be used for processing for multiple banks, the processing for our bank and that of regional financial institutions is done at different times of the day. Our processing is conducted in the morning and evening, while that of regional financial instructions is conducted in the evening and night to ensure timely delivery and to avoid mixing up documents. Regional financial institutions and our sometimes have different workflows, so we investigate inefficient operations in existing workflows to propose more efficient solutions.

When outsourcing administrative work, it is important to document the work in manual form to ensure that the consignor and consignee are aware of each other's work down to the smallest detail. When we were contracted by Kawasaki Shinkin Bank, we documented the current administrative work through numerous meetings and on-site observations. Based on our understanding of the current administrative work, we created an operation manual to visualize the content of the work after being entrusted with the project.

Some financial institutions do not document all administrative work, but instead use on-the-job training between staff members or simple memos. By documenting and visualizing the work, it is possible to prevent misunderstandings and to smoothly check each other's work when changes are made or problems arise.

We began discussions with Kawasaki Shinkin Bank around May 2018 and received a basic agreement in February 2019. With the cooperation Kawasaki Shinkin Bank and Primagest, we started the contract in October 2019, including the formulation of manuals, partial customization of the system, staff training, and verification through rehearsals. We have already received positive feedback on the fact that we were able to start stable operations on schedule.

We have also heard that this administrative collaboration is expected to improve the efficiency of the five staff members in charge of tallying and sorting. In the future, we expect to expand the number of financial institutions contracting our services and to expand collaboration to other operations.

We will work to increase the number of banks that contract us for joint tax and public money collection operations. We hope to promote cooperative and collaborative relationships with many regional financial institutions by utilizing our 11 savings administration centers and other facilities nationwide.

In addition, we will expand our collaboration beyond tax and public money collection operations, and will continue to promote the conversion of forms into data for use in joint operations, RPA, and AI, while listening to the needs of regional financial institutions.

We will continue to the sharing of administrative work with regional financial institutions as part of the regional financial infrastructure.