Japanese Bank to Stop Allowing ATM Cards, PCs For Account Access

Mitsubishi UFJ Financial Group is set to launch Emut Bank in 2027, marking the first digital bank affiliated with a major Japanese financial institution that will not issue ATM cards. Instead, customers will verify their identities through the bank's smartphone app for enhanced security measures in response to the increasing number of cyberattacks.

The smartphone app will also serve as the sole method for managing deposits, with no PC-based banking available. This shift comes amid a surge in cyberattacks targeting companies and phishing attacks aimed at stealing personal information. Emut's security technology is developed by Seven Bank, the consumer finance unit of Seven & i Holdings, the operator of 7-Eleven convenience stores.

Customers can still withdraw money from Seven Bank's approximately 28,000 ATMs, with the network expected to expand to FamilyMart convenience stores' roughly 16,000 ATMs. However, MUFG Bank ATMs will not be accessible. Despite this change, MUFG plans to potentially adjust this policy in the future. The move to eliminate cash cards represents a significant shift from the traditional method of withdrawing money, which has been the norm for decades.

This step by MUFG, Japan's largest financial institution, could prompt other banks to follow suit. Emut's reduction in costs due to the absence of cash cards will allow the bank to offer higher interest rates on deposits, potentially exceeding the usual 0.5% rate set by MUFG Bank. The interest can be paid out daily, rather than twice a year, making Emut the first Japanese bank to offer such a feature.