This is an email from Tokyo FinTech Digest, a newsletter by Tokyo FinTech.
Greetings from Tokyo on another rainy day, although the typhoon has passed!
We spent some quality time this past week thinking about where we are in terms of FinTech adoption. We know where we came from in the shape of “traditional” financial services, and we have some sense of what the future might look like, although it is a highly probabilistic view. But how far have we traveled?
The echo chambers that are the FinTech community and crypto Twitter make you sometimes think that the digital future will be here tomorrow. Then you get out into the real world and notice people dealing with bank notes, paper application forms, and “wet” signatures, whether by pen or stamp.
So if we looked at Moore’s adoption bell curve from “Crossing the Chasm” (which was developed to help high-tech marketers develop differentiated approaches based on the phase they are in), where would you put us currently in the FinTech world? For that, you would need to know that Innovators make up 2.5%, Early Adopters 13.5%, and the Early Majority & Late Majority 34% each of the total population. Please take a look and hold your thought for a moment.
Of course, you might say “It depends….” — it always does. However, if we gave you a fairly supportive environment, let us assume a place that has already had a near-100% ratio of cashless payments for a while, a place that has one of the world’s best cellular phone and fiber optic networks with a high e-commerce penetration, a place that generally comes out pretty high in innovation rankings — where would you put us on the adoption curve now? Please hold that thought as well :-)
We actually had our neighbor Korea on our mind. Looking at the revenue distribution between incumbents and challengers in the payment services space, for example, in 2019 the FinTech sector’s revenues stood at less than 1% of what traditional banks generated, according to research by Goldman Sachs. Their base case for 2025 sees this increasing to between 1.6 to 2.1%, with up to 5.5% under a bull-case scenario. So we are still firmly in Innovators/Early Adopters territory. The next decade will be super-exciting.
Please also check out the other topics we covered this week:
- Our branch-less, ATM-less banking future — a closer look at the density of bank branches & ATMs across Sweden, Germany, Singapore, Korea and Japan
- What is your target market ?— wealth distribution in Japan’s fast ageing society
- Delta Wall V — Japan’s annual financial services sector cybersecurity exercise got under way this week
- Sompo Japan introduces performance-based job promotions — a major shake up of the seniority-based employment system in the war for talent
- How to reduce Open Banking fees and foster competition — if the market fails, having the regulator step in can lead to a quantum leap
Tokyo FinTech is pleased to announce that we have signed up as a Community Partner with the Singapore FinTech Festival, taking place in early December in a hybrid format, with support from many global locations, including Tokyo.
The organizers have already been active with virtual events through their Road Shows & Green Shoots Series. On their website, you can watch prior discussions, and we will keep you appraised of upcoming sessions.
eXponential Finance Podcast
This past week, we have been published two more webinars as podcasts. First, we had a lecture in German with Professor Haghirian at Sophia University on the Japanese Management System and inter-cultural challenges. For our English speakers, the contents covered herein is fairly similar to the podcast we recorded with the Professor in the spring, which has been one of our top three episodes so far — you can find it here.
Second, we had the honor to bring back Harumi Urata-Thompson, Chief Financial Officer & Chief Investment Officer at Celsius Network, for a webinar on crypto lending, the role of Centralized Finance (CeFi) vs Decentralized Finance (DeFi), and all things Celsius, of course. With Harumi, we also had recorded one of our earliest podcasts, in case you are interested in hearing more about her career, and she had presented on her other passion, the business of space, at a Tokyo FinTech Meetup last year.
That is it from me this week. If you like this bulletin, please forward it to a friend (or two).
Please stay dry, healthy and in good spirits!