The State of FinTech in Japan 　

Natalie Shiori Fleming

2

History of Fintech Association Japan

2014/101st meetup

2015/9 FAJestablishe

d

2016/9 1st

anniversary

30 people Venture: 21Corporate:10Individual: 10

Total: 41

Venture: 53Corporate:97Individual: 39

Total: 189

3

Japan FinTech

2017Growth

2016 Action

2015Awarene

ss

4

Fintech = buzzword

Source: Google trends keyword: fintech location: JP

Interest in “Fintech” in Japan

From buzz to 83% growth

Source: METI “Current situations of FinTech”

2012 2013 2014 2015

559

4,030

5,586

10,223

Funds raised for FinTech companies (JPY M)

Japan FinTech Ecosystem

6

Payments Investment

Security Blockchain

Lending Accounting

CLO/Big Data

PFM

*examples of Japanese Fintech startups based on FAJ research

Key Trends in 2015-16

7

BlockchainCrypto-currency

Exchanges

Online PaymentsP2P

Crossborder

Automated InvestingRobo-advisory

Algorithmic TradingIncrease due to clarified law

Entry of large players

Entry of foreign players

Pay friends to split bills

Utilizing AI for smarter trading

Helping millenials invest

8

Banks vs. FinTech

Source: PWC Global Fintech survey

9

Successful Collaborations

Moneytree x Mizuho BankService using AI for

foreign currency deposits

X

Alpaca DB x Jibun BankPFM service in Mizuho’s

banking app

10

Government & Regulatory Support

- May 2016: regulation on virtual currency- Fintech promotion joint committee,IT strategy committeeLDP

METI

BOJ

FSA

Joint partyStudy group

Tokyo city

- Banking Act + Settlement Act amended- Dec 2015: Fintech support desk established- May 2016: Expert panel on Fintech startups established

- 2 study groups on Fintech conducted

- Fintech study group & investigative commisions- Proposals on legal changes

- Fintech Center established- Forum on Payments and Settlement systems

- Dialogue towards framework for a Global Financial Center

11

Opportunity?

Australia

Spain

South Korea

Canada

Italy

France

Germany

Britain

Japan

US

2.5

2.7

2.9

4.2

5.1

5.4

6.3

7.5

16.2

65

Top 10 Countries in Personal Financial Assets (Trillion USD)*

Sources OECD , Global Note*2013, Only OECD members

Cash/ Deposit; 53%

Stocks; 10%

Securities othen than stocks; 7%

Insurance/Pension; 26%

Others; 4%

Breakdown of Personal Financial Assets in Japan (2014 – B USD GDP)

TOTAL GDP

$9,288 Billion

12

Challenges

Employee MobilityHigh skilled employees not interested in taking risk on startups? Service DemandLow financial + IT literacy? Less dissatisfaction with existing services?

FundraisingCompared to US, difficult to raise large amounts of funding?

Laws/RegulationDifficult to build scalable Fintech business?Takes too long to launch?

Fintech

Fundraising

Employee Mobility

Service Demand

Laws & Regulation

13

3,394 6,571

12,187

22,286

37,434

56,787

Expected growth of Japan FinTech market (Million Yen)

Just the beginning…

2015 2016 2017 2018 2019 2020

2016 → 2020 : ~9x

Source Yano ICTNote1: Based on Sales of FinTech venture companiesNote2: 2015 figures are estimates. 2016 figures is forecasted.

14

FAJ Goal

Continue supporting the expansion of the Japanese FinTech ecosystem & globally

www.fintechjapan.org