(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
| Japan's Financial Institutions to Move Towards E-Commerce
September 28, 1998 (TOKYO) -- Japanese financial institutions such as
banks, securities companies and insurance companies are seriously tackling
|They are targeting individual investors in response to the Japanese version
of a financial "Big Bang," a sweeping reform that has hit its stride.
In the securities industry, various home trading services are appearing
in rapid succession to make it possible to trade over the Internet.
Even in the insurance industry, which has hitherto been slightly behind
in offering such technology, Mitsui Mutual Life Insurance Co. launched
network marketing of personal pensions in July.
Banks are focusing on providing electronic payment services linked to
Internet banking in view of the lifting of the ban of over-the-counter
sales of investment trusts scheduled in December 1998.
It is likely that efforts to realize EC by financial institutions will
out pace those of corporations in other industries and accelerate at
a great force.
Securities: More Products to Trade over the
The securities industry shows the greatest movement. With the new participants
in home trading services, there are all sorts of services imaginable
The most outstanding of are the mid- to small-scale securities companies
that offer unique services by making the most of their expertise.
Matsui Securities Co., Ltd., for example, will reduce the brokerage fees
for securities trading in return for limiting the services to brokerage
for stocks and index options only. The company is reportedly to discount
the brokerage fee for the home trading users up to as much as 70 percent
when regulation on handling fees is completely liberalized in 1999.
This is a move towards becoming a discount broker.
Leading securities companies that have been providing stock brokerage
services on the Internet for some time are also concentrating on expanding
and improving their services.
In July, Nomura Securities Co., Ltd., the largest securities company,
significantly increased the number of investment trust issues that can
be ordered over the Internet to 15.
Daiwa Securities Co., Ltd., a leading securities company, started home
trading in April 1996. It has observed a month-on-month increase in
the number of participants of around 10 percent since the beginning
of 1998, and is reported to have obtained more than 10,000 accounts.
Life Insurance, Nonlife Insurance: Online Sales
Compared to the securities industry, EC in the insurance industry has
only just emerged. Active players are limited to a few advanced corporations
at present. This is due to the diversity of insurance products by type
as well as complexity in what they have to offer, depending on incidental
conditions such as special requirements that alter the insurance premium.
Leading life insurance company Mitsui Mutual Life Insurance began to
market personal pension insurance over the Internet in July 1998 for
the first time. Sony Life Insurance Co., Ltd. has been marketing education
endowment insurance over the Internet since April.
Both companies realized online sales of insurance products are relatively
simple. They use electronic payment systems for collecting the insurance
With regards to the nonlife insurance industry, the London Insurance
in Japan uses its home page to accept applications for traffic accident
liability insurance and home asset insurance. It is also possible to
pay the insurance premium by credit card via the home page.
Nippon Life Insurance Co., Japan's largest life insurance company, uses
the Internet in a different way. It's Internet ATM launched in April
enables users to check the balance of insurance premiums and accumulated
dividends. Furthermore, it allows users to apply for a loan over the
Internet. By applying for cash withdrawal on a Web browser, the fund
will be transferred to the user's designated account.
Banks: Providing Services for Mobile Users
Banks have been spending more effort in Internet banking as well. Japan's
major city banks, including Sumitomo Bank Ltd. and Sanwa Bank Ltd.,
made Internet banking available in January 1997 and February 1998, respectively.
Aside from Japanese banks, U.S.-based Citibank plans to start Internet
banking in Japan in November 1998.
It seems likely that Internet banking will accommodate mobile computing.
It has been confirmed that six major city banks, including Sumitomo
Bank, Sanwa Bank, Sakura Bank Ltd. and Bank of Tokyo-Mitsubishi Ltd.,
will participate in a mobile banking service slated to start in December
1998 by NTT Mobile Communications Network Inc. (NTT DoCoMo). The service
offers various facilities such as money transfer and bank balance collation
via the Internet using a mobile telephone with a text-based Web browser.
In addition to the above, NTT DoCoMo plans to start in March 1999 an
Internet banking service called "ANSER-WEB" compatible with mobile banking.
Currently, ANSER-WEB is offered to over 100 financial institutions including
regional banks, and it will be utilized for mobile telephones as an
automatic teller's machine (ATM) terminal for individuals at many banks.
As Internet banking becomes dynamic, electronic payment services for
EC are taking hold.
For example, Sanwa Bank opened a cyber mall called "EC Direct" on the
Internet in July. It is planned that by the end of September, it will
become compatible with a system called Secure Electronic Commerce Environment
(SECE), a payment standard jointly developed by Fujitsu Ltd., Hitachi
Ltd. and NEC Corp.
Easing regulations will enable banks to handle investment trusts over
the counter in December 1998. That is expected to free banks to perform
online sales of such products as well as online payments.
Table: Financial products provided over the Internet by securities
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(Manabu Nagai, Staff editor, Nikkei Multimedia)