On May 11, 2009, Jibun Bank and Oracle Financial Services Software were awarded “Best Core Banking Project in Asia Pacific in 2008” at the 2009 Asian Banker Summit in Beijing. Jibun Bank was also honored as the “Most Innovative Entry.” Neil Katkov, senior vice president at Celent, a global financial services consulting firm, served on the panel of judges for this prestigious competition. Profit spoke to Katkov about Jibun Bank’s success as a mobile-based bank.
Profit: What, exactly, is mobile banking?
Katkov: It’s basically an internet bank where your mobile phone is the primary internet channel.
Profit: Why hasn’t a business like Jibun Bank happened before?
Katkov: One of the most interesting things about the financial services landscape in Japan is that even though the usual perception is that it’s a pacesetter in technology, mobile banking success stories have been very, very difficult to come by. Consumer adoption in Japan has been extremely low. Unless there’s a very direct value proposition for them—and that includes fashion—Japanese consumers typically resist the technology. They pick and choose the technology services that make sense to them, and have tended to focus on entertainment rather than financial services.
Profit: But aren’t banks already offering internet and mobile services?
Katkov: Banks have offered mobile banking channels for some years, but a successful mobile-based financial services model has been very elusive. Adoption has not been high, largely because they have not produced very user-friendly mobile services. That’s one reason Jibun Bank’s success to date has been so striking.
Profit: Why have Jibun Bank’s virtual services taken off?
Katkov: Because it’s made it easy. In Japan, bank applications are a long, involved process, and bank lines tend to be quite long. Jibun Bank has made it very easy for customers to open a banking account by e-mailing a photograph of their driver’s license from their cell phone. They’ve also pioneered the affinity approach to mobile marketing, which promises ease in sending account transfers to your friends. Personal checks are not used in Japan—people use either cash or account transfers, which can be quite time consuming to set up.
With Jibun Bank, some account transfers can be accomplished just by entering your friend’s phone number. I also believe that a lot of Jibun Bank’s success is in their positioning. They have the branding of a mobile carrier [KDDI and its au brand mobile phone service], which has a young, savvy, fashion-conscious customer base, plus the imprint of a traditional, solid, conservative bank [Bank of Tokyo-Mitsubishi UFJ].
Profit: What’s your prediction for Jibun Bank?
Katkov: Mobile financial services have been a very difficult nut to crack, but Jibun Bank has a very, very good start. Eventually a lot of consumers will use the mobile phone as a major financial services channel, just as internet banking is used today.
Profit: Winners of the Asian Banker IT Implementation Awards are determined through a rigorous three-month evaluation process. As one of the judges, what’s your sense of Oracle’s contribution?
Katkov: Oracle FLEXCUBE is a modular bank-in-a-box product, and though it’s not new technology, it’s a very functional and flexible system that can be customized. It allows banks to try new things. For example, Shinsei Bank, a very innovative bank, runs it on Microsoft Windows, which no bank of any significant size had ever attempted until they did it. Oracle has a number of other implementations in Japan, and these tend to be new, innovative banking models. In other countries, especially markets in Southeast Asia and Eastern Europe, there are many traditional banks with fairly large numbers of customers. Globally, Oracle FLEXCUBE is one of the most successful core banking software packages there is.