Once on a mission to buy up Southeast Asian banks, Japan’s biggest lender is now focused on digital investments to reach new customers and streamline operations, Bloomberg News reported.
The CEO of Tokyo-based Mitsubishi UFJ Financial Group Inc. (MUFG) told the news service he prefers to spend money on startups like Grab Holdings Inc., the multinational ride-hailing company based in Singapore, rather than purchase more brick-and-mortar financial institutions.
“We’re always looking for such opportunities to invest in tech firms,” Hironori Kamezawa told Bloomberg.
COVID-19 has spurred banks to further their move toward digitizing their operations since branch closures and social distancing make it harder to do business.
Kamezawa, 58, served as MUFG’s digital transformation officer until becoming CEO earlier this year. MUFG invested $700 million in Grab earlier this year.
The move gave MUFG access to the company’s millions of daily users. MUFG wants to offer financial services and loans to Grab users. Grab, for its part, wants to build a super-app that would offer a plethora of useful services. MUFG wants to strengthen its presence in Southeast Asia, which the bank sees as an important factor in future growth as Japan’s market continues its slowdown.
“The digital shift has already been one of the megatrends in society, but it has picked up pace in the wake of the pandemic,” Kamezawa told Bloomberg.
The idea, he said, was to tap Grab’s clients and the company’s expertise in artificial intelligence. The companies are collaborating on a dozen potential business projects in Thailand, Indonesia, the Philippines and Vietnam, where MUFG has commercial banking units, Kamezawa told the news outlet.
“We’re planning to generate profit by teaming up our Southeast Asian banks with Grab,” he said. “For instance, we have a credit model and Grab has its data on customers’ behavior. We’re trying to create new financial services by combining the two.”
Earlier this month, Grab’s online grocery shopping delivery service added Cambodia to the roster of countries serviced by its GrabMart shopping and delivery app, now available in eight Southeast Asian countries.
GrabMart, which also delivers a wide array of consumer goods as well as groceries, is now available to consumers in 50 cities across Singapore, Indonesia, Malaysia, Vietnam, Thailand, the Philippines, Myanmar and now Cambodia.
Asked whether the acquisition of commercial banks in the region is over, Kamezawa told Bloomberg he thinks so.
“We will recalibrate our global strategy, review growth areas and allocate resources accordingly,” he said.