Japanese-style identification will disappear soon in Tokyo

Photo by Charles Deluvio on Unsplash

A school master was busy selecting a commemorative item for pupils aged 12-years old. Girls and boys finished their elementary school, earning a gift for every single child from compulsory education in Japan.

When I reached that stage in Toyota City, Aichi long time ago, a temporary relief came with a tiny personal seal from a school master. My memory of the first impressive plastic seal is fuzzy, fading year by year to this day.

I didn’t have a slightest idea at that time that the Japanese banks required a personal identification with hanko, a personal seal, for an applicant to open a saving account in Japan. When I began a college life in Nagoya, the regular payment occurred in tuition and housing with banks and apartment owners. Once the bank account was open, it was not necessary for an account holder to use a personal seal for most of the transactions. 40 years on, it is not required anymore.

Japanese people still own personal seals at home. The important life events come with pushing official stamps made from elephant tusk. People push around when they purchase a car, buy a house, or get married. A heavy stack of documents piles with a requirement of official identification with a seal. Seal must be registered in the municipal government beforehand. The registration does not consume a lot of time but it should be cleared with public servants before the important events happen. If the stamp is not correctly pushed in a fuzzy red ink, the office enforces the owner to invalidate by crossing with two parallel lines. This act must be accurate.

This practice has been terrifying, especially very young generation who grow with touch panel of smartphones to swipe the screen to operate. The heavy hand-writing with precise characters consumes a lot energy and time after a long line of crowds in light air-conditioned city hall. It is very hot in the summer. In fact, some citizens complain about the lazy work of public officials before sweating civilians wary of traffic jams and unclear zones to follow.

The government wants to reduce the use of paperwork in the digital age. The Western-style signature has never been recognized as identification act, even when diners use their credit card at the restaurant in Tokyo. Four digit secret codes must be entered into a tiny machine at casher to prevent the fraud.

The officials in the government and lawyers with the Western education advocate the abolishment of personal seals and a transition to electronic processing with alternative identification. The claim is plausible because the paperwork is least efficient in processing. The upper house in the parliament intends to pass the Digital First Bill to reduce the forms and stamps. They call it the digital transformation or DX.

In this pressing issue, a solution has both good and bad faces in the debate. The episode of the Economist magazine sketches two sides of the reality very elegantly with some points still missing out. I will be writing a summary and filling out the missed areas here.

The story cast two issues; endangered seals in business and inefficient paperwork in the government. The mom-and-pop stores run a business of crafting stamps by selling items to consumers. The official stamps currently cost Yen 80,000 ($720) from elephant tusk. When I got married at 28, the official document required a registered stamp in the city hall. It cost Yen 30,000 ($270). I had not used it until I bought my house in ten years so it was a huge investment.

Now the government promotes a digitization in respect of paperwork reduction. It makes sense on surface. Generally speaking, the Japanese government has a lot of tax revenues to spend. By spending consulting fees to such consultancy as Accenture and PwC, the government expects their office to transform the business process. But they lag behind information technology. They also want tax revenue to stimulate the economy. That is a plot for adequate usage of tax revenue. The outcome is uncertain.

Proof of concept takes a long time and money. Average charge of consultants exceeds Yen100,000 ($900) per hour. The minimal group of digital prophecies numbers at least three members, cumulating Yen240m ($2.2m) for the first three months without deploying any system. The reduction of paper does not commence and is far away.

The paper-based bureaucracy is inefficient. There is no doubt about it. But the vertical layers of multiple recognition in the organization can avoid scandals. There are still a lot of scandals at the high level involving politicians. But the middle and lower level of misidentification is not tolerable. The damage cannot be compensated for good.

The personal seal industry is in danger, threatening 10,000 mom-and-pop local shops in Tokyo. One shop has a trace of 80 years old since the foundation. Some of them kept a tradition of craftsmanship for locals who retired from work at 65. Their pension is vested. They look for a community for connecting with people.

In the city of Nagareyama, a voluntary club of craftsmanship houses a group of retired men and women who spend two years crafting a doll and exhibit their art through the glasses. Locals browse the exhibition every year. The old generation still lives in the livelihood of seal shops, counting roughly 30% of the Japanese population aged 65 or older. The abolishment may erode the traditional craftsmanship.

The economic justification often surpasses the intangible cultural hobby. But taxpayers critically observe the outcome of digitization at the government. If the transition to electronic processing destroys the local community development, that is a subtle loss. The preservation of traditional hobby promotes the connection. The city of Nagareyma is just 30 km or 15 miles northeast of the parliament in Tokyo. They should consider the alternative to preserve the culture.

The era of digitization is in place and accelerating. Japanese people will be pushing fingers to the digital screen for identification. What kind of graduation gift does a school master select for celebration then? If it is a smart phone, this essay goes to an extra inning at the new stage and continues to engage in a new debate.

Taught marketing @ universities in Tokyo for a decade, ex-I-banker & mgmt consultant @ Kurt Salm (Accenture Technologies now), Georgia Tech educated