Canada    FinTech Guide    Chapter 8    Japan

8. Online Banking Services
Japan  Japan

In Japan, the usage rate of online banking services has been declining in recent years and the penetration rate of mobile banking remains low at less than 20%, in spite of a favorable environment for the services such as the progress in IT development and the widespred use of smartphones.

Legal Affairs

A person has to obtain a license from the Financial Services Agency (the “FSA”) to operate the banking business; therefore, it is extremely difficult to newly enter this business. There aren’t many regulations for a person who conducts banking business to provide online banking services, though there are some security-related requirements.

With regard to API-Banking, the government has been strongly promoting it and the Banking Act was amended in 2017 in response to such trends (the amended Act is scheduled to come into effect in the spring of 2018). This amendment introduces a registration system for electronic payment agencies. A person who has registered as an electronic payment agency will be able to operate business like communicating payment instructions utilizing IT, or acquiring account information from financial institutions and providing it to customers under entrustment from customers. In addition, the amended Act requires banks to make efforts to disclose API. FISC, an affiliate of the FSA, has announced the standards concerning security and contracts related to API-Banking, and banks will be required to comply with them in practice.

In the case of BaaS/BaaP, if a person acts as an agent for a bank (not for a principal) in providing services like fund management, the person will be subject to regulations applicable to Bank Agency Services.

Economic Conditions

Started by city banks around 1998, online banking services in Japan are said to be advanced compared to other countries in terms of collaboration and cooperation between city banks, etc. and business operators. However, there is no independent player that deserves special mention in this business category because this business is mainly considered as an ancillary service offered by mega-banks and other major players.

Contributing Authors

Ushijima & Partners

Hiroyasu Kageshima
Tokyo, Japan

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Chapter Index:

1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018