Israel Japan | Business Guide | 2023

T he fintech sector in Japan is seeing a huge and exciting growth enabled by the combined efforts of startups, government and industry players. In the last few years, the growth of the fintech sector in Japan has made existing processes, products and services, more efficient, cheaper and faster. Technology companies and the financial services sectors are creating new structures to provide digital-banking services, digital payments, robo- advisory services all the world over and in Japan it’s no different. According to Statista, the following trends can be expected in Japan in 2023 and ahead. The largest segment will be the Digital Payments segment with a total transaction value of $ 325 . 60 bn USD in 2023 . The number of people using Digital Payments is expected to touch 123 . 19 m users by 2027 . The average transaction value per user in the Alternative Financing segment is projected to be $ 57 . 64 k USD in 2023 . The Neobanking segment is expected to showa revenue growth of 35 . 8 % in 2024 . These deve lopment s have been exponential given that Japan started focussing on fintech much after other global financial leaders like the US, UK, China and Singapore. As part of its Japan Revitalization Strategy 2016 , the Government of Japan declared that the fintech sector was one of the pillars for future growth and brought about many regulatory changes to encourage this sector. One of the many industry-altering changeswas the amendment in theBanking act in 2016 to encourage banks to develop Information Technology subsidiaries to develop fintech businesses. With banks and tech firms working together, it was possible to introduce many digital innovations in the banking sector. Another tipping point was the Tokyo Olympics in 2020 which speeded up Japan’s adoption of the cashless payments system. To encourage digital payments, the Ministry of Economy, Trade and Industry initiated a program to get registered small and medium-sized retail outlets to offer customers a five per cent discount if purchases were made using credit cards, debit cards and digital wallets. METI aims to double the usage of cashless payments by 2025 . There are concerted efforts on part of both the central and local government to encourage fintech in Japan and Tokyo, respectively. In 2017 , the TokyoMetropolitan Government (TMG) launched the Global Financial City: Tokyo Vision, to make the Japanese capital a leader in the global financial rankings. TMG also launched the Accelerator Program – Fintech Business Camp Tokyo to call foreign tech and business startups to come to Tokyo. In the same year, Japan amended another Fintech is top priority in Japan Ja an is making up for lost time by aggressively trying to create a fertile landscape for fintech to thrive Israel-Japan > Business Guide > 2023 54 > Fintech in Japan > Sector review