JAPAN’S REGIONAL BANK CONSOLIDATION

This is just the beginning of a battle for survival in the red ocean.

The intense competition is not the result of financial authorities' encouragement but rather grows out of the zero interest policy and resultant alteration in the operating environment.

Japan's banks have already been striving to raise efficiency by consolidating their core systems.

Now what they need to focus on is leading the digital initiative, which can be adaptable to diversifying needs, rather than focusing exclusively on gaining broader market to increase ROE.

New markets and customers should be calling for innovative financial services.

Setting and implementing a new strategic framework that has not existed up until now is key to success in this era.

 

S&P Global Market Intelligence: Japan's regional banks under pressure to seek scale for survival

Nikkei: Japan's regional bank consolidation gains momentum

 

Related releases:

(JP) Legacy Modernization in the Japanese Banking Industry Part 2

(JP) Legacy Modernization in the Japanese Banking Industry Part 1

English version will be forthcoming shortly!

 

資金決済革命

決済を取り巻く環境は劇的に変化しつつあります。消費者がキャッシュに代わるより便利なものを求めていることは明らかですが、金融機関はこうしたニーズにあまり積極的に答えようとしてこなかったように思われます。一方、この分野は、金融サービスプロバイダにとっては、ブルーオーシャンのようにチャンスが広がっているといえるでしょう。先駆者として新たな決済プロジェクトを投入できる新市場の成長が期待できるからです。
 
既存の決済サービス市場は競争が激化しており、多くの決済オプションが溢れかえったレッドオーシャンです。市場参入を目指すプレーヤーが既存の市場で成功を収めようとするなら、既存の決済手段に取って代われる価値提案を創出する必要があります。 企業活動や消費者の生活により密着する方法を開発しなければなりません。そうなると、金融サービスをめぐる競争のカギは金融業界の外にあるのかもしれません。YouTubeやリッツ・カールトンのような顧客認知、Google やAmazonのような顧客行動予知などがその例です。
 
未来の個人向けの決済サービスは、デジタルネイティブ世代の日常生活における新たな情報と価値移動の基盤として、既存の電子マネーを凌駕する破壊力を持つでしょう。未来の 法人向けの決済サービスは、決済指図と契約を電子化、自動化することで、企業活動の情報と価値移動の源泉を握り、既存のサプライチェーンを革新することが期待されます。

セレントはここに、破壊的なイノベーションと「資金決済革命」の可能性を見出します。

Uncontested market space

The payments environment is undergoing dramatic change, driven by the changing behavior of payment services users. While consumers have clearly expressed a desire for something more convenient than cash, the supply side has been seemingly unwilling to meet this demand. Financial institutions have failed to provide handier and more convenient alternatives to cash. Service providers should see this field as a blue ocean – a market space ripe for pioneering new payments initiatives.

The intense competition over incumbent payments services makes that market a red ocean – a market space crowded with many existing payments options. Would-be players need to create value propositions that can supplant existing payment methods if they wish to succeed. They need to develop ways that allow them to be more intimately intertwined with the activities of corporations and the lives of consumers . Indeed, the key to competition in financial services may lie outside the financial industry, coming from services and businesses that specialize in knowing the customer such as YouTube and Ritz-Carlton.
 
At Celent, we believe that new payments services for retail customers will be a watershed, replacing existing e-money and serving as a platform for information transfer and value transfer for a digital native generation. Next-generation transaction banking services for corporate customers will enable the overhaul of existing supply chains and the exercise of tighter control over corporate information and value transfer through digitizing and liberating contracts and settlement.
 
Celent sees great potential for significant innovation and a "payments revolution" from firms willing to challenge the status-quo despite the apparent immediate obstacles.