4. Points to be discussed:
•
Aim
•
Shareholders
•
Business Principles
•
Services
•
Organizational Structure
•
System at JNB
5. Points to be discussed:
•
Targets
•
Competitors
•
Comparison with USA
•
Alliances
•
Scalability v/s Investment
•
Conclusion
6.
7.
8.
9. Overview
•
Idea was given by YOSHIYUKI MIYAI
•
The first internet-only bank of JAPAN
•
Had no Physical Branch
•
Established on September 26, 2000 with capital of ¥ 20 Billion
•
Had 5 Directors and 1 President in Senior Management
•
Had a Flexible, Flat and Team-like structure
•
Mostly supervised by IT department staff
•
Also became the official bank of Yahoo! Japan
10. President Profile
•
Was the manager at Sakura Bank Headquarters
•
Worked to plan mass-retail corporate business promotions
and construction of DBMS at Sakura Bank
•
Became the president of JNB on September 2000
•
Was the youngest and lowest paid president in Japan Banking
Industry
11. Focus of JNB
•
Customer Satisfaction
•
Convenient access to accounts
•
Competitive rates
•
Customization
•
Secure transmission of information over internet
•
Team-like structure and small workforce
•
Aim to build up its own Brand name
12.
13.
14. Shareholders Profile
Sumitomo Mitsui Banking Corp.
•
Was formed by a merger
between Sakura Bank &
Sumitomo Bank
Fujitsu Limited
•
Japan’s top PC maker company
•
Also involved in making
information systems and
electronic components
•
Assets exceeding to $940
Billion
•
Deposits amounting to $590
Billion
•
Had revenues of ¥5.48 trillion
till 2001
•
Had 27 million accounts, 578
branches & 7600 ATMs
•
Had 517 consolidated
subsidiaries in more than 100
countries
15. Shareholders Profile
Nippon Life Insurance
Mitsui & Co.
•
World’s 3rd largest insurance
company
•
Japan’s largest trading
company
•
Revenues ranged to $82
billion
•
•
Was a partner with Deutsche
Bank & SMBC
Had a global network of 549
subsidiaries in Japan and
Abroad
•
Also owned 13.2% shares of
DoCoMo Aol
•
Had almost 13 million
clients
16. Shareholders Profile
NTT East Corp.
•
•
•
A regional telephone company
of Japan
Hold by one of the largest
telecommunication group NTT
Corp.
Had sales reaching app $98
billion
NTT DoCoMo Inc.
•
Established by NTT Corp in 1991
•
Had 32 million mobile phone
subscribers
•
Offered paging, maritime, inflight phone services, wireless
internet service
•
Pioneer of 3G service in Japan
•
By 2000, sales figures reached
$30 billion
17. Shareholders Profile
Tokyo Electric Power Co., Inc.
•
World’s largest electric
power company
•
Had 26 million clients
•
TEPCOs revenues reached
$40 billion till March 2000
18. Organizational
Structure
•
Flexible, Flat & Team-like
structure
•
Single physical office with
no other branch
President
•
Small & young workforce
•
Low cost based
•
Approximately 100
employees
Full-Time
Staff
Planning
Information
Technology
Part-Time
Staff
Sales
Call Centre
19. System @ JNB
Information Systems
National
Banking
Information
System
Managerial
Information
System
Multiple
Channel
Customer
Interface
24. US Comparison
First Internet-only bank in the world was Security First
Network Bank in USA
It failed to achieve its targets due to:
•
Time consuming to use
•
Poor customer service
•
Massive advertisement fees
•
Less Value-added services
25. Internet Banking
Advantages
Disadvantages
•
24-7 availability
•
Lack of brand recognition
•
Saves operating costs
•
No physical presence
•
Reduces the inefficiencies
•
Security & Privacy issues
•
Small workforce
•
Time consuming
•
High interest rates
•
No physical branches
•
Can be accessed via mobile
internet
26. Banking in Japan
•
Japanese have their assets deposited with private banks and
postal savings accounts
•
Low interest rates were offered on ordinary & term
deposits(0.02% & 0.1% respectively)
•
Japanese preferred to use cash on credit so the ATMs in Japan
installed approximately were 130,000
•
Online banking was also available with Sumitomo Bank &
Sakura Bank but to some extent
27. Targets
•
Acquire 1 million accounts till 2002
•
¥ 1 trillion of deposits
•
¥ 84 billion of loan balances
•
Earn maximum profit by 2002
•
Efficient modes of money transfer
•
Installation of ATMs throughout Japan
28. Customers Profile of JNB
Distribution in terms of Age
Distribution in terms of Access
Hour
45%
40%
24%
35%
0:00-9:00
44%
30%
32%
25%
9:00-17:00
17:00-24:00
20%
Distribution in terms of Sex
15%
10%
25%
5%
0%
Below 20
20-29
30-39
40-49
50-59
60-69
Above 69
75%
Male
Female
29. Competitors
Bricks-and-Mortar Banks
Sony Bank
•
Major competitor of JNB
•
•
Variety of Value-added
financial services
An Internet-only bank
established in mid of 2001
•
Had a greater investment ¥37.5
billion
•
Strategies were of lower
workforce, higher interest rates
and no physical branch
•
Free ATMs in Japan
•
Provided online shopping service
•
Dominant use of ATMs
•
Traditional banking culture
•
Limited online banking
services
30. Competitors
IY Bank
•
An internet-only bank which
started working in May 2001
•
It had an ATM based
network with 9 city banks
called BANCS
•
It had linked-up ATMs with
Sanwa Bank, Asahi
Bank, Shizuoka Bank &
Yokohama Bank
eBank
•
An internet-only bank which
started its operations in June
2001
•
It provided small-value
online purchases
•
Easily accessible 24/7
31. Banks
JNB
IY Bank
eBank
Starting date of
Operations
October, 2000
June, 2001
May, 2001
June, 2001
Major
Shareholders
SMBC 60%, Fujitsu Inc.,
10%, Nippon Life
Insurance 10%
Sony Corp., 80%, SMBC 16%
IY Bank 51%, Seven-Eleven
Japan 49%
Japan Telecom,
Yamato Transport,
Ericsson Holding
International
Starting Capital
C
r
i
t
e
r
i
a
Sony Bank
¥20 billion
¥37.5 billion
¥20.3 billion
¥4.4 billion
Starting Services
Ordinary & Term
deposit, Money transfer,
Small-size consumer
loans, Cash & Credit
card
Deposits, Card loans, Bank
payments
ATM-based services
Settlement of
payments
Business Targets
1 million accounts, ¥1
trillion deposits, ¥84
biillion of loan balance
¥500,000 billion in 3 years, ¥1
trillion in 5 years, customers:
400,000 in 3 years and 600,000
in 5 years
¥60 billion in a year, 10
million customers per day,
profitability in 2 years
No information
Strategies
higher rates, lower fees,
small workforce, no
physical branches
higher rates, lower fees, small
workforce, no physical branches
24/7 ATMs, low cost
operations, loan and card
business focused
No information
35. Alliances
•
Yoshiyuki Miyai had a vision.
“It is possible to start a bank without alliances. But it would
have been difficult to expanding the business by leveraging
the alliances’ customer bases.”
•
JNB had two kind of alliances.
Shareholding Alliances
2. Non-shareholding Alliances
1.
36. Scalability v/s Investment
•
Scalability was a major concern with JNB
Customer behavior was rather unpredictable
• Demand might surge dramatically
•
•
In order to cope with sudden demand changes
Operations should be scalable to limits for above average
• Need to make accurate demand forecasts
• Need to build infrastructure
•
37. Schwab-A scalability case
•
Online brokerage firms illustrated scalability problem in US
•
Such market leader was Schwab
•
Online customer assets were $418 billion till March 2000
•
Schwab suffered 4 site crashes even after upgrading its systems in 1999
•
In 2001 US economy slowed down and Schwab suffered 30% fall in its trading
volume
•
Schwab had to layoff its staff and to senior managers have to receive salary cuts
•
Company spent $800 million to upgrade the systems and to better its business
•
The company was caught in the dilemma of scalability versus investment
38. Conclusion
•
Yoshiyuki Miyai was a man of vision & believed that success
cannot be achieved in days
•
He kept eye on IT systems and HR to respond to ups & downs
in the market
•
He has to make well use of the consolidated alliances
•
JNB can become successful if it grasps opportunities and
overcome all the obstacles
•
JNB can become the 21st century winning model of Japan
only if the company faces the rise & fall efficiently
