Japan Sees Restrained Fintech Activities

Japan, despite its growth trajectory in various fields, is doing a catch-up game in fintechs:

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The common perception around the world is that Japan, with its history of being one of the world’s top centers of innovation, is that it is ahead of its time. While this is true in many respects, especially in the field of electronics, technology and medicine, many Japanese watchers believe that in the world of fintech, the country is still playing catch-up game. For example, while the world has made great strides in the payments domain and cashless transactions are a norm than exception, Japan continues to remain a cash-based economy. Some see this as result of lack of sustained efforts in promoting fintechs.

However, there is something unique about the country. While cash continues to be primary medium of transaction, Japan can boast of creating innovative transaction methodologies. For example, way back in 2001, the country invented a contactless card based on RFID for use in railway travel. This is when the world was still struggling with the process of manual ticketing. The card got updated subsequently for adaptation on mobile phones, even before the smartphones and mobile apps came into being. Today, this tool, Suica, supports Apple and Android phones and is widely used across a variety of smart devices.

GOVERNMENT SUPPORT

But Japan has woken up and fintech is a major talking point for the government. What really hastened the effort is blockchain, which is today disrupting the entire banking and financial services domain. The government also relaxed rules governing investment and ownership norms for banks so that funds are made available to use information technology on a vast scale for modernizing the sector. Large banking corporations today have in-house divisions to shape technology to create automated transaction tools.