One of the biggest banks in Japan, Sumitomo Mitsui Financial Group, wants to boost the level of investments in financial technology firms once it is able to do so after certain rules are lifted by regulators.
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The Wall Street Journal reported on Wednesday (Dec. 30) that the firm’s president, Koichi Miyata, said in an interview with the paper that his bank has been talking with financial tech firms ahead of the rule change. The executive said that the smaller startups “could be our competitors in the financial world, but they could also be partners.”
Under current rules, banks are not allowed to hold more than 5 percent in companies that are not direct players in the banking industry. Bank holding companies are not allowed to hold more than 15 percent.
But under new rules that will be forthcoming from the bank regulatory agency of Japan, known as the Financial Services Agency, legislation would be given over to Parliament that would loosen up investment restrictions in the FinTech arena specifically. That would be important, as banks seek to gain a foothold against the upstarts that threaten the traditional banking model, especially in digital payments and security, where larger players lag. There’s even a phone number that would-be investors will be able to call in order to ask questions about FinTech technology.
Sumitomo has an innovation department devoted to FinTech that launched two months ago and extends to embrace technologies such as mobile banking. By way of example, noted WSJ, there is an Indonesian bank, Bank Tabungan Pensiunan Nasional, in which Sumitomo owns a significant stake of 40 percent, that has banking technology in place where branchless features (read: no bricks or mortar) offer banking services to people in remote areas, chiefly via mobile devices they use to conduct transactions.