Japan is considering making its business banking model more flexible in order to take advantage of advances in financial technologies.
Japanese banks and regulators are showing concern that existing regulations mean that business bank holding companies cannot invest freely enough in IT ventures in the face of growing competition from alternative financial services.
They feel that Japan’s current banking model, based on traditional industrial finance, needs to be updated to deal with the growth of e-commerce and non-bank payment methods.
According to a Reuters source, the relaxation would also allow “bank holding companies allocate assets and functions more freely among subsidiaries”.
Regional banks might also find it easier to “hive off and integrate certain operations like asset management as they come under pressure to merge amid low growth prospects,” the report said.
Japan’s Financial Services Agency will start an official discussion on the rule changes in March, and the government could submit a bill early next year.
