Japan to ease rules on investing in fintech ventures
Print Edition
A laggard in embracing the “fintech,’ or financial technology, revolution, Japan is set to ease investment restrictions that could free up the flow of capital in an economy sitting on an estimated US$9 trillion in individuals' cash deposits.
Strict regulation, easy access to credit due to rock-bottom interest rates, and weak demand for innovative financial services from a risk-averse population that still prefers cash to credit cards, have strangled fintech's advance in Japan.
Fintech ventures — usually startups leveraging technology from cloud data storage to smartphones to provide loans, insurance and payment services — raised US$2.7 billion in China last year, and over US$1.5 billion in India, according to CB Insights data. Ventures in the United States drew investment of around US$7.4 billion.
In comparison, investment in Japanese ventures reached only around US$44 million in the first nine months of 2015.
Now, Japan's financial industry regulator hopes relaxed rules on investing in financial ventures, and a new system for regulating virtual currency exchanges will pass through parliament by May — a first step in kickstarting the fintech revolution in the world's third-biggest economy.
"The law changes aren't a goal, but a first step," Norio Sato, a senior official at the Financial Services Authority, told Reuters. "Fintech will have a big impact on financial services."
The changes, which will allow banks to buy stakes of up to 100 percent in non-finance-related firms, will free up Japan's three megabanks to enter into tie-ups with fintech ventures developing services including robotic investment advisory and blockchain, the decentralized ledger technology behind the bitcoin digital currency.
Mitsubishi UFJ Financial Group, Mizuho Financial Group and Sumitomo Mitsui Financial Group have said they are eying such investments, having previously been limited to holding 5-15 percent in startups.
Under pressure from weak loan demand, the megabanks see an opportunity to earn money through fintech, but are also aware of its potential to disrupt traditional business models.
The unpromising fintech environment in Japan — which was blindsided by the high-profile collapse of the Mt Gox bitcoin exchange in 2014 when hackers stole around US$650 million worth of the digital currency — has seen some entrepreneurs go overseas for funding.
Junichi Horiguchi, co-founder and CEO of bitcoin service provider Zerobillbank Ltd, set up his start-up in Tel Aviv last year to take advantage of Israel's advanced technology industry.
Investment in fintech start-ups by global banks and tech giants including Google and Facebook is far more common in Israel than in Japan, he said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
