Financial Technology Revolutionizes Lives in Developing Countries, Including Japan

In recent years, financial technology (fintech) has made significant strides in expanding access to financial services in developing countries, including Japan. According to a survey by the World Bank and other organizations, fintech companies in developing countries reported higher growth in the first half of 2020 than their peers in developed economies.

Fintech Innovations in Southeast Asia and Japan

One Japanese fintech startup, Global Mobility Service (GMS), is making a significant impact by offering mobility and finance solutions to people in Southeast Asia and Japan. GMS provides loans to customers who need a vehicle for work but lack collateral or credit history. The company installs a device on the vehicle that remotely monitors payments, ensuring the customer continues to pay down the loan.

Benefits of Fintech

The technology allows financial institutions and vehicle manufacturers to reach a new group of customers, enabling drivers to establish credit history, receive lower interest rates, and access other financial services.

• Increased accessibility: Fintech solutions like GMS make it easier for people to access financial services, even without traditional collateral or credit history.
• Improved creditworthiness: By providing loans and monitoring payments, fintech companies can help individuals establish a positive credit history.
• Economic growth: The success of fintech companies like GMS can stimulate economic growth by increasing income and improving money management skills.

Building a Robust Fintech Ecosystem in Japan

The success of GMS has led to investment from major Japanese brands and membership in the Japan Business Federation (Keidanren). The company aims to serve 100 million people by 2030 and broaden financial inclusiveness to break the cycle of poverty.

FinCity.Tokyo: A Hub for Fintech Growth

FinCity.Tokyo, an organization founded by the Tokyo Metropolitan Government, estimates that the country’s fintech market will grow by 51% annually to $11 billion by 2022. The city is committed to creating a supportive environment for fintech companies to thrive.

The Consortium for Japan International Asset Management Center Promotion (JIAM)

JIAM serves as a forum for industry players, advocates for updating regulations, and provides networking opportunities for members from overseas and Japan. One way to foster an ecosystem is by promoting independent asset managers in the industry, which tends to be dominated by financial institutions.

International Interest in Japan’s Fintech Ecosystem

Overseas companies are taking notice of these changes in Japan’s fintech ecosystem, with artificial intelligence firms and JIAM constituents such as FundApps, Truevalue Labs, and causaLens drawn to the country. JIAM is actively pursuing relationships with domestic and overseas industry organizations.

Embracing Innovation and Diversity

“It’s essential to embrace newcomers and innovators as well as players in the existing ecosystem,” says Aritomo Keiichi, cofounder of JIAM. “Japan is changing a lot in a positive manner. We are embracing more diverse people with different backgrounds and lots of talent, while becoming more international.”