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Capital Markets & IT -lakyara

Financial institutions are under constant pressure to reduce costs, improve operational efficiency, adapt to regulatory changes and grow their business. NRI believes that a combination financial knowledge and information technology are crucial to the industry’s growth and development. Through our lakyara reports, NRI identifies the various capital markets and IT issues impacting our clients and the future of their business.
*Organization names and job titles are current as of the publishing dates

Latest Updates

Digital Innovation

Aug. 2018

AI use in the financial sector

Tatsuo Tanaka

AI is increasingly being deployed in the financial sector, particularly in areas such as risk assessment, financial market analysis and research and investment portfolio management. Currently used mainly to improve workflows, AI is expected to eventually be utilized in new businesses to be launched by financial institutions as they are compelled to play new roles.

Retail Business

Aug. 2018

Japan’s individual defined contribution pension plan enrollment soon to surpass one million

Hisashi Kaneko

Japan’s iDeCo (individual defined contribution) plan enrollment is growing rapidly in the wake of a January 2017 expansion of iDeCo eligibility. iDeCo plans differ from corporate defined contribution plans in several respects, the biggest of which is that most iDeCo participants do not open iDeCo accounts until they are in their 40s or 50s. With this tendency toward opening iDeCo accounts at a relatively late age unlikely to change, iDeCo plans should be redesigned to reflect their distinctive nature as a retirement savings vehicle dependent on self-motivation.

Digital Innovation

Jul. 2018

Update on digitalization in Corporate Japan based on NRI survey data

Yuki Ariga

Japanese companies’ CIOs and IT staff have a keen interest in utilizing AI and/or the IoT, albeit mainly to increase operating efficiency. Japanese companies should broaden their digitalization activities to include discovering new knowledge or adding more value to their goods and services.

Brokerage Business

Jun. 2018

Issues to be addressed as Japanese equity markets migrate to T+2 settlement

Yusuke Fujita

The Japanese security industry is preparing to transition to T+2 settlement of equity trades by July 2019, following the lead of major overseas markets. A smooth transition will require diligent preparation on an industry-wide basis.

Corporate IR

Jun. 2018

Proposed Revision of Japan's CG Code: continuous discussion for effectiveness of governance reforms

Chie Mitsui

Japan's Corporate Governance Code is in the process of being revised for the first time in its three years of existence. The current Code is said that many companies' compliance is still a mere formality and the Code's directives are not driving improvement in governance. The Code will likely need to be periodically revised on an ongoing basis to effectively broaden compliance to smaller companies and other still-noncompliant
companies.

Security

May. 2018

On the front lines of blockchain security

Teruhito Tagomori

While blockchain-related businesses as exemplified by cryptocurrency exchanges are booming, security vulnerabilities persist. Losses due to security breaches have been increasing. When developing a system that utilizes a blockchain, one must incorporate defense-in-depth into the system and perform risk-based evaluations of the system’s architecture and operational design from prospective attackers’ standpoint.

Digital Innovation

Apr. 2018

Outlook for cryptocurrencies and blockchain has turned hazy

Shin Kusunoki

The FinTech boom has largely revolved around bitcoin and blockchains in particular, even as experts warned of various risks posed by cryptocurrencies such as bitcoin. These risks manifested in full force in 2017, undermining the narrative that blockchain technology would inevitably revolutionize the financial system. The outlook for cryptocurrencies and blockchains has turned quite hazy.

Retail Business

Mar. 2018

Transformation of loyalty programs into financial services

Katsumi Tomita

The ZhongAn Group is at the forefront of insurance-related system development. ZhongAn Loyalty programs with financial features have been popping up in recent years, including programs in which point balances accrue interest or earn investment returns and programs that convert loyalty points to cash deposited in brokerage accounts. Such innovative loyalty programs are likely to become increasingly common in pursuit of both customer satisfaction and business expansion.

Chinese Capital Markets

Mar. 2018

China's risk prevention initiatives in Internet finance and FinTech sectors

Takeshi Jingu

The Chinese government is focusing on financial risk prevention again in 2018. Its efforts to regulate and improve Internet finance and FinTech should bear fruit in 2018. Meanwhile, protection of personal information has started to emerge as a new regulatory priority.

Retail Business

Mar. 2018

How should you implement your digital advice strategy?

Jasen Yang

Wealth management firms of all types are moving to implement robo-advisor solutions. Conventionally, there are three choices in implementing them: build your own, buy your own, and renting. The best choice requires an honest evaluation of your organization’s goals,
capabilities, and weaknesses.