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Exploring Japan’s Fintech Sector

Impressions from Matchi CEO, David Milligan

Matchi Japan Fintech

Matchi CEO David Milligan recently travelled to Tokyo, Japan, to meet with various corporations, banks, trading houses, fintech firms and government organisations. His aim was to understand the emerging technology landscape in Japan, to learn from the people he met about their thinking on fintech, mobility and regtech developments, and to share with them KPMG and Matchi’s global capabilities in sourcing these sorts of technology solutions. He was also invited by the Australian embassy to speak at a seminar on trends in global fintech, especially around funding and the most noteworthy themes emerging in 2018.

We asked him about his experience and to share his highlights, lessons and opportunities. Here are some snippets of that conversation:

What struck you as most interesting about the Japanese fintech landscape?
It was a really diverse group of people that I got to meet with, which I think gave me good insights into the environment from different perspectives. What struck me was that while Japan is following the same path that most other countries have followed over recent years (in terms of big organisations looking to engage with local fintechs, especially around creating accelerators and hubs for Japanese fintech), there are also a number of more mature Japanese fintechs now looking to expand beyond Japan’s borders. While they are relatively few in number, they have developed a number of strong solutions in-country that are ready for export into new markets now.

In terms of mobility, I was struck by the degree to which large firms are grappling with finding truly unique technology solutions in the mobility space. They are seeking differentiation from competitors and are not afraid to think outside of the norms. Some of the solutions we heard about that are in development are almost Sci-Fi stuff – they are revolutionary in a real sense, completely cutting edge and have the potential to fundamentally change how people interact with vehicles and the world around them.

During my week-long trip, I had the opportunity to meet with representatives from the central bank, various regulators and Tokyo provincial government. What was interesting was how enthusiastic they are about understanding what’s happening in global fintech and how they can attract fintech firms from outside of Japan and to position the country as more of a fintech hub. They were also interested in hearing more about regulatory technology – regtech – and how the sector is growing and the implications of that growth. There was quite a lot of interest in Matchi’s RegTech Portal.

Japan has interesting economic challenges, given its ageing population, falling birth rates and stagnant growth. Is this affecting the way that the fintech environment is being shaped in the country?
Definitely. I had the chance to meet with a financial services industry association. They are actively seeking out fintechs who can help to address the challenges the country is facing. With more older people who are living longer, for example, they need to find ways of helping people to prepare better for retirement. It’s an interesting challenge because, on the one hand, the Japanese population is quite conservative when it comes to investment decisions, so many people are holding cash, which loses value over time. On the other hand, there’s a fascination with crypto currencies, which could potentially lead to people making risky investment decisions. The people I spoke with highlighted the need to identify and support fintechs from around the world who can assist with these sorts of issues, at every level of the value chain.

Was there anything that stood out to you about the Japanese fintech sector, comparing it globally?
I was struck by the way that Japanese culture permeates even the financial services sector in that people pay enormous attention to detail and are very focused and discerning. Care is taken at every level and everything is done well. What are your top takeaways from your trip for the emerging tech market?

  • That despite its small size, the Japanese fintech market is relatively mature and is rapidly going through the learning curve.
  • That although Japan has until now been a fairly inwardly-focused market, partially because of the language barrier, both Japanese fintech firms and financial institutions are now actively looking to engage more broadly.
  • That Japanese financial institutions are looking to understand fintech solutions from the rest of the world, as is the Japanese government, while Japanese fintechs are looking to take their solutions to a global market.


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