Tokyo FinTech
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Tokyo FinTech

Yuko Kawai, General Manager for Europe at the Bank of Japan

Yuko Kawai, General Manager for Europe & Chief Representative in London, Bank of Japan

I had the privilege to be on a panel together with Yuko Kawai and Makoto Shibata (MUFG) at the Risk Japan Conference two years ago. At that time, Kawai-san was the second Head of the FinTech Center at the Bank of Japan, which was founded in 2016. In 2018, Kawai-san moved to London to become the General Manager for Europe and Chief Representative in London.

Given the scarcity of women in senior positions in finance generally, and in Japan in particular, Kawai-san’s career is remarkable on many dimensions. If I recall correctly, she had a successful career as a commercial banker with Chemical Bank, one of predecessors of today’ JPMorgan Chase. When she was offered her first position at the Bank of Japan, Kawai-san apparently was not too optimistic that it would turn into a long-term engagement. “I might do this for a year or two”, she told her husband. That was sixteen years ago.

In addition to her professional success both in the private and the public sector, Kawai-san has an extremely warm and engaging personality, and is a lot of fun to be around. Any discussion with her is extremely intellectually stimulating. So when I noticed the following conversation appear in Japanese in “Tech Beat Shizuoka”, I knew I wanted to make it available in English to an international audience. Any mistakes in translation are mine (and Google’s).

I am working in London now. Before I came here, I also worked in financial technology, so-called FinTech, and I am also focusing on social change using information technology.

I am from Shizuoka, spent high school in Shizuoka, and left to study at Kyoto University. When I got my first job, I joined the Tokyo branch of an American bank to get an international job though I could not speak English. At that time, the information flow was truly one-way from the media such as newspaper and TV, and there was a big difference in the content of the information received depending on where you were. Nowadays, you can get almost the same information from anywhere in the world through the internet, and even more innovative, it is an interactive flow that also allows individuals to contribute information. Now that individuals are moving around with small, smart computers in their pocket, the provision of goods and services has become much more on-demand and customized to individual customer needs.

So today, even if you do not live in a large city, you can still find an exciting job, and you can connect with the world. I think that information technology is currently changing people’s lives most dramatically in China, where one can access more than 100 types of services through simple fingerprint authentication on smartphones. There are countless startups that are aiming to lift up the population of more than 1 billion people through technological revolution.

Europe, where I live now, is, like Japan, a society where traditions are valued, but then there are also companies, regions, and countries that aim for evolution and revolution. There are many examples of entities that start from small size and aim for big achievements. For example, at the VIVA TECH advanced technology conference held in Paris every year, the display of French local public institutions is noteworthy in the glittering large corporate pavilion. There is an enthusiasm that makes people take their own initiative and not at the state’s request, and develop innovative solutions. Speaking of France, it seems that only the news of demos and strikes against the reform of the young president is being reported, but forward-looking initiatives are progressing steadily, and the scale of VIVA TECH grows every year. It seems that more than 10,000 startups came from all over the world this year. There are extensive business negotiations with large companies and local governments bodies, etc. which try to take in as much of the wisdom and technology of the start-up world, and it appears that the sales of start-ups are extraordinary. While the French state supports conference itself, the results business development after the event very much depend on the hard work of all participants.

Europe has large and small countries. For example, Luxembourg has a population of only 600,000, which is smaller than Shizuoka City, but the GDP per capita makes it one of Europe’s leading economies, about three times as large as Japan. The strategy is to succeed in attracting people and knowledge from overseas and providing services to overseas, with finance as the core industry, and about half of the staff at the central bank are of foreign nationality. Even if we as the country of Japan do not think that we can improve much more because we are already successful now, there are always new developments happening at the cutting edge, and we have to think about how to adapt to stay competitive. Every time I go to this country, various people from the minister to the start-up ask questions about FinTech in Japan and other countries, and they are receiving new ideas one after another.

There are many other examples. Lithuania is also a small country with a population of 3 million, next to e-nation Estonia, and is almost the same size as Shizuoka Prefecture, but has succeeded in attracting start-up companies and has made itself a name in electronic payments. In Israel, where civilian conversion of military technology is permitted, new ideas are being produced like on a conveyor belt by making use of its high technological ability, and although the startup survival rate is said to be as low as 12%, it has succeeded by producing multiple unicorns. In Morocco, a number of companies from Europe have set out to gain access to the final population frontier, the African continent. In Africa, where telephone and banking networks are not developed, domestic remittances using mobile phones have suddenly popped up everywhere, and society is basically skipping over the middle stages of development.

Compared with America and Asia, it is honestly astonishing that we encountered so many cases in Europe where population growth is slow and the long history may hinder development. There is not one single recipe for success, but it seems that there are some commonalities.

First, starting from the user’s point of view. We are not thinking about technology and geography, but what is the demand and what is the pain point of the users. In addition to addressing individual issues, there are many places where you can proceed with so-called design thinking that seeks to solve problems comprehensively.

The second is to use an external force. While there is a great deal of merit in developing everything in-house and at home, incorporating third-party perspectives and technologies will shorten the development period and limit the downside in case of failure. Everything is not thought out right at the beginning (in a “waterfall methodology”), but iteratively through agile development in different stages.

In any case, it is easy to say, but it is difficult to executve. In order to proceed with such development, it is first necessary to raise the awareness of employees, and it is often said that it is difficult to change the thinking of top management. Also, just because you spend a lot of money does not mean that you will be successful. Collaborations between large companies and startups often do not go well because of differences in culture and mindset and speed, so there is no shortage of mistakes.

Still, many people are looking to the future. If you look at what is happening in Europe, not in America or Asia, it is possible that you can do the same thing in Japan! Just when I was thinking, I heard the story of this “TECH BEAT Shizuoka”. The image I have in my hometown Shizuoka is “conservative”. But if you think about it, there are many companies with cutting edge technology centering on hardware. What is happening in Europe is also happening in Japanese regions. Not all regions will succeed. Let us remove the stereotypes, remove the geographical and psychological barriers, and create a community that aims for an exciting world.

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