As Japan edges away from nearly a decade of negative interest rates, the Bank of Kyoto, a regional financial institution, has initiated a digital learning program to equip its workforce, many of whom have never operated in an environment of positive interest rates, with the necessary skills for lending and managing deposits under these new conditions.
Japanese Bank Starts Training Staff on Positive Interest Rates
About 3,300 employees of the Bank of Kyoto are being educated on the significance of interest rates, the process of determining lending rates, and the implications of rising interest rates for both the bank and its clientele through this program.
The curriculum includes insights from veteran executives familiar with handling business in a positive interest rate landscape. It focuses on strategies to negotiate higher fees with borrowers. Designed to be accessible and convenient, the online training modules last around 30 minutes and can be viewed on smartphones.
These sessions aim to prepare the staff for a competitive deposit attraction landscape—a shift from when deposits were seen as a burden due to the excess cash banks held—and provide practical advice on communicating interest rate increases to borrowers and enhancing deposit growth through improved customer interactions.
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Tadashi Shimamoto, deputy general manager at the Bank of Kyoto’s human resources and general affairs division, emphasises the program’s intent to familiarise younger employees, especially with the dynamics of a positive interest rate environment.
He highlights the importance of adapting to these changes in mindset and operational strategies to ensure the bank is well-prepared for the forthcoming shifts.
Japan has maintained its policy rates at or below zero for years due to persistently low inflation and economic challenges. This has left savers earning minimal interest and borrowers enjoying exceptionally low mortgage rates.
However, with inflation now surpassing the Bank of Japan’s 2% target for an extended period, there is anticipation of a move to increase short-term interest rates possibly as soon as this week, marking the first such hike since 2007.
This anticipated policy shift necessitates a significant adjustment for financial institutions and their clients, who are accustomed to the prolonged era of cheap money.
