Japan's biggest banks are racing to adapt to changing business conditions amid a shrinking population and the spread of online banking.

Many have laid out plans to downsize their workforce and massive network of branches while investing in "fintech" -- technological innovation in the financial sector -- to streamline their operations and make banking more convenient for their customers.

Mitsubishi UFJ Financial Group Inc. is the country's largest financial group by assets, and the red-logoed branches of its core banking unit are a common sight in central Tokyo.

Despite such ubiquity, the Bank of Tokyo-Mitsubishi UFJ has seen the number of visitors to its branches fall 40 percent over the past decade.

In a report on the financial sector published in October, the Bank of Japan warned that "financial institutions in the country may have an excess of employees and branches compared with demand."

This is, in part, due to Japan's rapidly shrinking populace. According to government data, the number of people living in the country peaked at 128.08 million in 2008 and has been on a downward trend since.

With one of the lowest birthrates among advanced economies and a strict immigration policy, the population is projected to fall below 100 million by 2055.

Mitsubishi UFJ's response is to say that it looks to trim the unit's more than 40,000-strong domestic workforce by around 6,000 by the end of fiscal 2023.

Group CEO Nobuyuki Hirano said he does not foresee layoffs but instead plans to do this "organically" by keeping the number of new hires down as staff taken on in bulk in the run-up to and during Japan's late 1980s asset bubble economy gradually reach the age of retirement.

Accompanying the fall in brick and mortar banking is an inverse rise in online banking. The number of retail customers using the bank's services via a mobile device or PC has increased more than 40 percent in the five years from fiscal 2011.

The financial group also plans to eliminate the workload equivalent of 9,500 employees by automating mundane tasks such as checking mortgage documents, a move a company official said would "free up manpower to put toward growing businesses such as wealth management."

In October, Mitsubishi UFJ spun off a startup called Japan Digital Design focused on developing fintech, such as artificial intelligence that gives credit scores to corporate bank accounts.

The financial group's plans, which also include turning 70 to 100 of its roughly 500 domestic branches into lightly staffed, heavily automated locations, represent an industry-wide shift toward downsizing.

Mizuho Financial Group Inc., Japan's No. 3 bank group by assets, plans to consolidate its 500 branches into 400 by fiscal 2024 and cut a whopping 19,000 jobs by fiscal 2026.

Sumitomo Mitsui Financial Group Inc., the No. 4 bank group, is also undergoing branch consolidation and looks to invest 20 billion yen ($175 million) in fintech over the next three years.

These moves could also be indicative of the way Japan's many dozens of regional banks are headed.

Such smaller banks are especially feeling squeezed by fierce competition amid the Bank of Japan's ultralow interest rate policy and are facing pressure to downsize and consolidate their operations.

"If such competition continues to intensify, many regional financial institutions could see their ability to absorb losses decrease," BOJ Governor Haruhiko Kuroda warned in a speech in December.

"The stability of the financial system is, along with price stability, a crucial policy target for the BOJ. As such, we will continue to monitor the situation and do everything in our power" to ensure such stability, he said.