Japan’s financial market is also home to outdated bedrock regulations.

Currently in Japan there are approximately 270 Shinkin banks (Credit Unions). On average, these average a deposit balance of around 500 billion yen and loans of 300 billion yen, with some large Shinkin banks that exceed regional banks in size.

Joining Forces:
The January 2015 announced merger of Ogaki Shinkin Bank and Seino Shinkin Bank was premised on a proactive business strategy looking five to 10 years in the future and taking into account the shrinking population and economy. The new entity will boast a post-merger total of 700 billion yen in deposits, falling in the realm of mid-tier financial institutions and with a notably high capital adequacy ratio. With Ogaki boasting a capital adequacy ratio of 12% and Seino 15%, this union of banks—which could go it alone—speaks to a strategic move to maintain or enhance regional market share and consolidate forces to achieve greater economy of scale. Both institutions are located in central Japan’s Gifu Prefecture, which is home to a number of robust regional institutions including Juroku Bank (assets of 5.0 trillion yen), Ogaki Kyoritsu Bank (assets of 4.2 trillion yen), Gifu Shinkin Bank (assets of 2.1 trillion yen), and also one of the few areas of Japan that is enjoying staunch competition in retail banking. This merger can also be seen as hinting at things to come.

The dominant take is that strategic partnerships and mergers will proceed apace among institutions of suitable scale and sound management until an appropriate number for the market has been reached. A trend similar to that witnessed in the U.S. credit union industry is expected, in which as the hurdle to survival has risen, especially in urban areas, many credit unions boasting assets in excess of 2 trillion yen are created. It would seem moving forward that in addition to scale, financial soundness, and operational efficiency, that having a strategy that focuses on offering niche services that fill local needs will prove essential.
(Lessons that can be learned from developments in the U.S. credit union industry are addressed in detail in the below Celent report.)

Challenges and Strategy:
From the perspective of efficiency, regional financial institutions will for the most part operate in partnership with other institutions using a shared center system rather than operating such systems themselves. This will solve cost and resource challenges, but at the same time could hamper efforts to offer unique products and services when it comes to taking advantage of IT. In addition, until now there have been other system–related obstacles to partnerships and mergers across regions. Outdated “bedrock” regulations remain. You might say this area of the industry has been protected by virtue of the system. However, the largest impediment would seem to be human resources. We hope to see strategic and proactive initiatives taken by networks of financial institutions and overarching bank entities such as the Shinkin Central Bank.

Partnerships and mergers taken with strategic intent are urgently needed. For example, Shinkin banks, which boast freestanding shop networks, manpower to undertake business activities, and with strong local ties, by joining forces with dedicated online players (in banking, insurance, and securities), with their robust online sales and powerful national mass-marketing capabilities, could quite conceivably realize strategic online-to-offline (O2O) channel development and omnichannel marketing. If they can do this, then they can be expected to devise unique services that set them apart from megabanks and mega-insurers and—in this time of shrinking populations and declining local economies—create novel financial service delivery models. In doing so, key success factors can be expected to boil down to the use of technology and human resources.


Catch CU: The Ongoing Evolution of the Credit Union Market


Stubborn “bedrock” regulations remain in Japan’s financial market.

These are embodied by proposals to expand the operation of Tokyo Stock Exchange (TSE), which at five hours daily has shorter trading hours than both London and New York, and to make interbank payment transactions real time 24 hours a day year-round.

Last November, TSE announced that it was going to delay introducing longer trading hours for stocks (1). The bourse said that it had explored expanding trading hours with a focus on night trading, but had been unable to get the majority of brokerage houses to sign on. TSE believes that even expanding trading is not necessarily a recipe that can be expected to attract diverse market participants—all of which points to strong fears that Tokyo’s international competitiveness will falter.

Meanwhile, the Japanese Bankers Association (JBA) last December pledged to offer world-leading payment services. These new services are to be expanded to cover what have been non-business hours, such as nights, weekends, and holidays. Toward this end, the organization committed to establish a new year-round, 24-hour platform that will enable funds to be sent between banks in real time (2). At the same time, when reporting on this story, The Nikkei, Japan’s leading business daily , noted only that the JBA had decided to launch a new interbank system that would be active 24 hours days, omitting the information about real-time interbank payments being made possible around the clock year-round because there are banks that are not keen to extend business hours and it is not clear when in fact this will be up and running (3).

Deregulation and technological progress are the two wheels that propel the vehicle of innovation forward. The proliferation of digital technology heightens the possibility of technological innovation catching on. At the same time, deregulation creates opportunities for the application of innovative technology. The dismantling of “bedrock” regulations of massive scale and, beyond that, establishing a growth strategy will not happen minus collaboration on the part of government—that is to say financial regulatory authorities—and entrepreneurs or corporations —namely financial institutions and financial service vendors. Put another way, if these entities can work well together—with motivated businesses with expertise in digital technology and a government-backed growth strategy initiative functioning as two wheels advancing in tandem—then innovation can be expected to accelerate.

Digital technology that can be used to realize innovation is already here. The challenge is to create opportunities to apply it—opportunities that presuppose the dismantling of these bedrock regulations.


(1) Tokyo Stock Exchange (TSE)

(2) Japanese Bankers Association (JBA)

(3) January 9 edition of Nikkei



Prime Minister Shinzo Abe launched his third Cabinet in late December 2014.

Subsequently, it has spelled out a basic policy to revitalize Japan’s economy as formulated by the Headquarters for Japan’s Economic Revitalization (1). In it, the government pledged that Japan will create new markets and new business opportunities by reforming the so-called bedrock regulations in areas such as agriculture, employment, healthcare, and energy.”

Bedrock regulations refer to firmly entrenched regulations that parties with vested interests—typically government organs, administrative institutions, or industrial groups—oppose reform, which makes the loosening or dismantling of regulations far from easy. Since the 1980s, the government has pursued deregulation in many areas with an eye to facilitating economic growth. However, bedrock regulations are the areas that have faced strong resistance from parties with vested interests, and, consequently, they have been put off for years and years—that is until now.

There are several laws that are subject to this debate, laws such as the Road Transportation Act, the Pharmaceutical Affairs Act, the Medical Practitioners Act, the Food Sanitation Act, the Agricultural Land Act, the Health Insurance Act, the Social Welfare Act, the Radio Act, and the Worker Dispatch Law. However, there exist other “bedrock barriers” to growth that are non-legal and unrelated to existing systems and arrangements.

This article uses the bedrock regulation removal debate to search for and expose potential innovation opportunities.


On Labor Market Reform
Efforts to remove so-called bedrock regulations in Japan continue.

Following the announcement of a plan to implement reform at the intersection of the fields of agriculture and finance via regulatory changes to affect the Central Union of Agricultural Cooperatives, widely known as JA-Zenchu (which overseas a body of agricultural cooperative organizations nationwide known as JA) (2), the media reported that labor system reforms that will cut across all industries are also in the pipeline (3).

The global market has entered an era of hyper competition in productivity. In conjunction with this, companies will pursue the automation of business processes using digital technology as well as a shift to self-service. As such, existing labor regulations will no longer apply and will be rendered outdated. Consequently, the focus of labor regulations will be required to shift to work that requires human intelligence or that is otherwise not amenable to digitization.

Celent has long advocated deregulation and technological progress/innovation as an opportunity to innovate and driver of innovation. The proliferation of digital technologies boosts the possibilities of technological innovation and, at the same time, deregulation offers an opportunity for innovative technologies to be applied.

In addition, and on a different note, Celent hopes to see the creation of new employee incentive plans as a way to accelerate growth strategies. Western stock-based incentive systems epitomized by stock options have come with an array of obstacles . If a new, Japanese compensation sharing plan that links corporate results with individual compensation can be created, then it is likely that highly motivated entrepreneurs well versed in digital technology, coupled with the backing of a nationally driven initiative to back a growth strategy, will be able to accelerate innovation.




政府の掲げる「岩盤」規制(bedrock regulations)改革に反して、法律や制度以外にも、成長戦略の妨げとなる「岩盤」が存在する。






  • 組み合せ
    2015年1月に発表された、大垣信用金庫と西濃信用金庫の合併は、「5年後、10年後の経営戦略を考えた。人口減少、市場縮小を見据えた前向きな合併」との両金庫発表(1) 通り、合併後の規模は預金量で7千億円と中堅並みだが、高い自己資本比率に注目すべきである。大垣が12%台、西濃は15%台という優良な信金同士の組み合せは、単独でも生き残れる信金が、より戦略的に動き、地域シェアの維持向上と、一層の規模の経済を狙ったものと解せる。岐阜県は、十六銀行(資金量5兆円)、大垣共立銀行(4.2兆円)、岐阜信用金庫(2.1兆円)と優れた地域金融機関が多く、全国有数のリテール金融激戦地。業界の将来動向を写す合併とみなされ得る。
  • アウトルック
    適切な規模と健全な経営内容を持つ信金同士が戦略的な提携・合併を経て、適切な数の組織が生き残るとの見方が支配的であろう。米国のクレジットユニオン業界(2) 同様に、存続のためのバーは更に高まり、既に都市部を中心に、2兆円規模を超える大手信金が多数誕生している。今後は、規模と健全性、効率性に加え、信金ならではのニッチなサービスを提供し、ローカルなニーズを満たす戦略が不可欠と想定される。
  • 課題と戦略

路面店舗や職員の渉外活動、地域社会に強い信用金庫と、ネットや通信販売、全国規模のマスマーケティングに強いネット専業(銀行、保険、証券)が組み戦略的なO2O(Online to Offline)チャネル展開やオムニチャネル(Omnichannel)マーケティングを実現すれば、メガバンク、メガ保険との立ち位置の違いからユニークなサービスが展望され、少子高齢化、地方経済の衰退が叫ばれる中で、新たな金融デリバリーモデルが展望されよう。その際のKFSは、テクノロジーの活用と新たなリソース、特にマーケティングノウハウとなるはずだ。


(1) 合併趣意書 (大垣信金、西濃信金)


(2) 米国のクレジットユニオン業界からの示唆は、下記セレントレポートなどに詳しい。




2014年12月に発足した第3次安倍政府は、「日本経済再生本部」において日本経済の再生に向けた基本方針を発表した。 そこでは、「農業、雇用、医療、エネルギー等のいわゆる岩盤規制(bedrock regulations)に対して、一歩たりとも後退することなく改革を進め、新たな市場とビジネスチャンスを生み出していく。」と明言している。






東京証券取引所は昨年11月、検討していた現物株の取引時間の拡大を見送ると発表 した(1)。夜間取引を中心に可能性を探ってきたものの大半の証券会社から同意を得られなかったと発表。東証はこのまま取引時間を拡大しても多様な参加者が見込めないとの認識を示すが、東京市場の国際競争力の低下が大いに懸念される。





(1) 取引時間の拡大に関する検討結果について (東証)
(2) 平野会長記者会見 (全銀協)
(3) 銀行振込24時間化、宣言とは程遠い実情 (日経)


2014年12月に発足した第3次安倍政府は、「日本経済再生本部」において日本経済の再生に向けた基本方針を発表 した(1)。 そこでは、「農業、雇用、医療、エネルギー等のいわゆる岩盤規制(bedrock regulations)に対して、一歩たりとも後退することなく改革を進め、新たな市場とビジネスチャンスを生み出していく。」と明言している。







先の農業分野、系統金融分野における、全国農業協同組合中央会(JA全中)の改革(2) に続き、全産業に関わる、雇用市場の制度改革案(3) が報道された。





(1) アベノミクス成長戦略の実行・実現について (日本経済再生本部)

(2) JA全中を「解体」 政府、改革期間3年に短縮 (日経)

(3) 年収1075万円以上の専門職対象 労働時間規制外す (日経)