Tag: startup

[Summary] The Rise of Online Pawnshops: Blending Traditional Finance with Digital Innovation | FinTech Topics #115

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FinTech Topics, RESEARCH

[Summary] The Rise of Online Pawnshops: Blending Traditional Finance with Digital Innovation | FinTech Topics #115

(Original Video in Japanese was published on the FINOLAB CHANNEL on Apr. 15, 2025）

Thank you for tuning in to FINOLAB’s FinTech Topics. In this edition, we explore the digital transformation of one of the most traditional financial services: the pawnshop. While pawnshops have long been part of everyday financial life, today we are seeing a new wave—services moving online, combining centuries-old models with modern technology.

The Origins and Role of Pawnshops

Pawnshops have a surprisingly long history, predating banks and formal lending institutions. The core idea is simple: customers deposit valuable items as collateral and receive a loan in return. If the loan is not repaid by a set date, the item is forfeited and sold. This model existed in ancient Greece and Rome, and in Japan, records date back to the Kamakura period. However, it was during the Edo period that pawnshops became widely adopted as a source of financing for the general public. In this sense, pawnshops represent a fundamental form of finance.

In Japan, operating a pawnshop requires a license under the Pawnshop Business Act. Even if the service is online, the same license is necessary. Applications must be submitted to the local police department’s Public Safety Division, and approvals are granted by the prefectural Public Safety Commission. This is distinct from the licensing required for other types of moneylending or financial institutions.

Furthermore, since pawned items can eventually be sold, a secondhand dealer license is also required—especially for online resale through auctions or e-commerce platforms. This license is also issued by the Public Safety Commission via the police.

Changing Trends: Pawnshops vs. Secondhand Dealers

Japan’s secondhand goods market—especially in branded goods—is growing steadily. Meanwhile, the number of licensed pawnshops continues to decline. Interestingly, after amendments to the Secondhand Articles Dealer Act in 2020, the number of secondhand dealers initially dropped due to re-registration but has since rebounded. This trend suggests a shift in how value is exchanged—more people are turning to resale rather than collateral-based borrowing.

Online Pawnshops as a Modern Finance Tool

By moving pawnshop services online, traditional businesses are embracing digital finance. These platforms offer a quick, hassle-free way to obtain short-term loans, especially appealing for users seeking faster alternatives to consumer loans. While online pawnshops are still a niche compared to the broader consumer finance sector, they’re starting to attract attention due to ease of use and the ability to bypass face-to-face interactions.

Another growing area is the purchase and resale of secondhand goods. Consumers no longer need to visit physical stores; now they can sell or pawn items online with AI-powered evaluations. This has been particularly successful for brand-name goods, electronics, and jewelry, where value assessments can be streamlined and transactions executed quickly.

Global Case Studies

Several startups around the world are leading the charge in online pawnshop services:

  • iPawn (USA): Originally an online pawn loan provider, iPawn now focuses on gold buyback services.
  • Cash Converters (UK & Australia): Targets lower-income demographics and offers both lending and resale services for items like home appliances, electronics, and jewelry.
  • PawnHero (Philippines): Founded in 2015, it accepts mobile phones, jewelry, and branded items via delivery service. Loans are processed quickly after AI appraisal.
  • Cashify (India): Focused on digital devices like smartphones and laptops, catering to India’s large low-income population. Items are evaluated online and shipped for fast payouts.

The Japanese Market: Room to Grow?

In Japan, auction services like Mercari and Yahoo Auctions have made secondhand item trading popular, so the concept of turning unused items into cash is well established. However, these services can involve long wait times and tricky price negotiations. Online pawnshops address these issues by offering immediate cash solutions.

Though Japanese consumers were hesitant in the past about buying used goods, attitudes have shifted. The reuse market for smartphones, electronics, and luxury goods continues to expand. There is growing potential for pawnshop services to serve a broader, everyday market beyond high-end items.

Examples of Online Pawnshop Services in Japan

  • Shichiya Kanteikyoku (Pawn Appraisal Bureau): A hybrid service combining online evaluations for branded goods and electronics with in-store support.
  • Daikokuya: A nationwide chain that offers evaluations via messenger app, LINE. Users can send photos of their items and receive loans after mailing them in.
  • Garage Bank: A startup founded in 2020 that operates the CASHARI service. Users discreetly take photos of their items with their smartphone, receive appraisals, and instantly convert them into funds. The platform allows for flexible options—users can keep using their item, sell it, or donate it after a certain period.

Looking Ahead

The emergence of online pawnshops highlights a broader global trend: the digitalization of traditional finance. Across the world, companies are rethinking how collateral is evaluated, what items are accepted, and how loans are disbursed. In Japan, the success of secondhand platforms and AI-powered evaluations point to a growing acceptance of online pawnshops as a viable financial tool.

As technology continues to evolve, we may see even more innovative offerings that go beyond the conventional pawnshop model—blending speed, convenience, and flexibility to meet the changing needs of modern consumers.

[On-Site Report] Money 20/20 2025 Asia, One of the World’s Largest Fintech Events: Introducing 6 Emerging Startups Unknown to Japanese Audiences

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FINOLAB COLUMN, RESEARCH

[On-Site Report] Money 20/20 2025 Asia, One of the World’s Largest Fintech Events: Introducing 6 Emerging Startups Unknown to Japanese Audiences

（Original article in Japanese was published for FinTech Journal on May. 26, 2025）
https://www.sbbit.jp/article/fj/163878
Author: Makoto Shibata, Head of FINOLAB

Money20/20 Asia 2025, one of the world’s largest fintech events, was held from April 22–24 in Bangkok, Thailand, at the Queen Sirikit National Convention Center (QSNCC). Since its inception in 2012 in the U.S., Money20/20 has grown into a global platform driving innovation in payments, financial services, and technology, now spanning Europe, the Middle East, and Asia.

After being previously hosted in Singapore, the Asia edition returned in 2024 to Bangkok post-COVID. The 2025 schedule includes events in:

  • Bangkok (Asia): April 22–24
  • Amsterdam (Europe): June 3–5
  • Riyadh (Middle East): September 15–17
  • Las Vegas (USA): October 26–29

What Sets Money20/20 Different?

A key strength of the event is its focus on networking. Attendees can use the official app to view participant profiles, request meetings, and reschedule if needed. The Connections Lounge, centrally located in the venue, facilitated 15-minute meetings with impressive efficiency compared to other global events.

Main Theme and 3 Key Topics at Money20/20 Asia

The overarching theme of Money20/20 Asia was:
“Empowering Humanity Through Collaboration: Pioneering Secure, Frictionless, and Sustainable Fintech Innovation in Asia.”
Though somewhat abstract, this theme reflects an effort to highlight the regional uniqueness of the Asian fintech landscape.

Key Topic 1: Cross-Border Payments

Cross-border remittances and payments dominated the exhibition floor. Global players like Wise and Nium showcased their services, along with blockchain-based solutions from Circle, Ripple, and others.
E-commerce-focused payment providers such as LianLian Global and Worldline also had a strong presence. Major international and local banks, as well as Visa and Mastercard, emphasized global payment services.
Overall, the event had similarities with SWIFT’s annual SIBOS conference.

Key Topic 2: AI and Fintech

AI-powered innovation in finance was a hot topic across four main stages.
Generative AI’s impact on regulation, business operations, innovation, and fundraising was discussed from various perspectives (regulators, banks, startups, VCs).
While assessments varied, all agreed that AI is driving an unprecedented transformation in finance.

Key Topic 3: Financial Inclusion and Sustainability

There were discussions around expanding access to financial services and balancing environmental goals with economic growth—especially relevant in Asia’s diverse economies.
However, these sessions received less attention, as most participants were more focused on payment-related themes.

6 Notable Startups You Might Not Know About in Japan:

At the venue, areas like “Innovation Village” and “Startup Hangout” showcased promising startups aiming to break away from traditional finance. Among them, the following six stood out for their innovation and business scalability:

  1. OmniWave
    Provides next-gen asset management intelligence using AI and machine learning. Unlike many startups vaguely claiming to use AI, OmniWave clearly demonstrated value by analyzing big data—including social media—to generate actionable investment advice.
  2. Riverchain
    Targets the construction industry with digital solutions for working capital and supply chain efficiency. A standout for embedding finance into a traditionally analog industry through focused digital transformation.
  3. Papaya
    Offers POS and payment systems tailored for F&B shops in Southeast Asia. It focuses not on technical innovation but on usability for small businesses, helping them benefit from digital payments.
  4. Coded Solution
    Aims to connect Web3 and AI, offering tokenization, blockchain infrastructure, and digital payments. Unlike many vague Web3 pitches, they showed concrete use cases like securities issuance and stablecoin-based payments.
  5. Giraffe AI Labs
    Bridges legacy finance with blockchain through advanced market technologies and infrastructure. Based in Singapore, with expansion into Dubai and Canada, they aim to become a global fintech player.
  6. Payd
    Provides earned wage access for freelancers and part-timers, already serving over 100,000 users in Thailand and Malaysia. Their approach meets the growing need for flexible financial services across employment types.

Themes from Six Japanese Representatives

At the event with 250+ speakers, six Japanese speakers from regulators, financial institutions, startups, and VCs spoke on:

  • Kenji Ikeda (Financial Services Agency): Japan’s approach to sustainable fintech and green finance collaboration across Asia.
  • Nobuya Kawasaki (Mitsubishi UFJ Bank Singapore): How legacy banks innovate and collaborate with startups to handle digital transformation.
  • Kohei Ueda (Mizuho Bank Singapore): AI, blockchain, and machine learning’s impact on banking and challenges in tech adoption.
  • Shinichi Takatori (Kyash CEO): The future of banks focusing on smartphone-centric customer experience and debates on human vs AI customer service.
  • Takeshi Nagasawa (Merpay CEO): Fintech’s role in driving next-gen e-commerce payments amidst growing competition.
  • Akio Tanaka (Headline Asia): Venture capital trends in fintech amid the AI revolution and global investment outlook.

What Should Japanese Fintech Stakeholders Learn?

Money 20/20 Asia, while smaller than other fintech events, offered a well-balanced program with keynotes, panels, exhibitions, and networking. The event was user-friendly with thoughtful logistics for attendees. However, the heavy focus on payment solutions may have left participants interested in other areas wanting more. It would provide some learnings to us in Japan to think about planning any FinTech related events in the future.

6/4 Key Takeaways from CONSENSUS 2025

EVENTS

6/4 Key Takeaways from CONSENSUS 2025

📍 Held in Japanese only

Overview:
CONSENSUS 2025, one of the world’s largest global conferences for Web3 and crypto, was held in Toronto, Canada from May 14 to May 16, 2025. FINOLAB has participated in this conference for three consecutive years (2023–2025) to keep a consistent pulse on the evolution of blockchain, crypto, and Web3 technologies.

In this in-person event, members from FINOLAB and guest speakers will share insights and key trends observed at CONSENSUS 2025. The session will include individual presentations and a panel discussion focused on one of the conference’s central themes this year: Stablecoins.

For those who find it difficult to attend international conferences, this session offers a great opportunity to catch up on global developments and apply them to your own Web3 strategies.

Register Here

Event Details

  • Date: Wednesday, June 4, 2025
  • Time: 18:45–21:00 (Doors open at 18:30)
  • Venue: FINOLAB 4F Event Space
    　Map & Info
    　Otemachi Building 4F, 1-6-1 Otemachi, Chiyoda-ku, Tokyo
    　Note: Reception is located on the east end, near Tokyo Station
  • Language: Japanese
  • Participation Fee: 1,000 yen
  • Organizer: FINOLAB Inc.

Agenda

18:30-18:45　　開場　
18:45-19:00　　CONSENSUS2025開催レポート　株式会社FINOLAB 公門和也氏　
19:00-19:15　　CONSENSUS香港/トロントから見える違い　株式会社 finoject 三根公博氏
19:15-19:25　　(仮)テクノロジーレポート　株式会社電通総研 浅野達郎氏　
19:25-20:00　　パネルディスカッション「ステーブルコイン」
　　　　　　　JPYC株式会社 岡部典孝氏、株式会社 finoject 三根公博氏、株式会社FINOLAB 公門和也
20:00-20:30　　Networking/閉会の挨拶

Please note that the program and speakers may be subject to change.

Register Here

[summary] Too Scary… What Are the Latest Cases in “AI-Generated Crime”? Trends and Regulatory Changes.

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FINOLAB COLUMN, RESEARCH

[summary] Too Scary… What Are the Latest Cases in “AI-Generated Crime”? Trends and Regulatory Changes.

（Original article in Japanese was published for FinTech Journal on Apr. 23, 2025）
https://www.sbbit.jp/article/fj/161696
Author: Makoto Shibata, Head of FINOLAB

With the rise of generative AI, financial crimes are becoming more sophisticated and harder to detect. In response, Japan is updating its regulations, including key changes to the Act on Prevention of Transfer of Criminal Proceeds, to better prevent fraud. This article highlights the growing threats and how we can prepare for them.

Overview of AI-Driven Financial Crime Trends

This article focuses on:

  • Three phishing-related crime methods
  • Three deepfake case studies
  • Six key countermeasures to protect against evolving fraud

Key Legal Changes and Implications for Fintech

In February 2025, Japan’s National Police Agency announced revisions to anti-money laundering laws, set to take effect in April 2027. Key changes include:

  • Individual Identity Verification: Online ID checks using selfies and ID photos will be discontinued. The system will move to using the My Number card’s electronic authentication.
  • Corporate Verification: Copies of ID documents will no longer be accepted. Originals are now required.
  • Alternatives for Those Without IC-enabled IDs: Documents like resident records must be submitted by mail.

These changes are a response to how AI can now create convincing fake videos (deepfakes) from a single image, making current identity verification methods unreliable.

3 Key Trends in Phishing Attacks

Phishing cases are increasing, with AI making scams more convincing and widespread. Here are three notable trends:

  1. Voice Phishing (Vishing): AI-generated voice messages pretend to be from agencies like Japan’s Financial Services Agency, tricking people into sharing personal and banking details.
  2. SMS Phishing (Smishing): Fake texts from delivery companies or telecom providers ask users to click links and input banking info.
  3. Targeting Corporations: Scammers now also target businesses with fake calls and emails, leading victims to enter corporate banking credentials on fraudulent websites.

These tactics have caused major losses, including a high-profile case involving Yamagata Bank with possible damages of 1 billion yen.

3 Deepfake-Related Crime Cases

Criminals are using AI-generated images and videos to commit fraud. Here are three real cases:

  1. Hong Kong (2024): A company lost 200 Million HK Dollar after scammers used a deepfake video call to impersonate its CFO and request a money transfer.
  2. Georgia (2024): Deepfakes of celebrities were used in fake crypto ads, scamming over 6,000 victims out of 27 Million Pound.
  3. UK (2024): A romance scam using deepfake videos led to a 77-year-old victim losing over 17 Thousand Pound.

6 Measures to Combat Evolving Financial Crimes

To protect against these increasingly sophisticated threats, both tech and human-focused measures are essential:

  1. Use of deepfake detection tools
  2. Adoption of multi-factor authentication (MFA)
  3. Multi-step approval processes for transactions
  4. Regular employee training
  5. Promoting skepticism toward impersonation
  6. Establishing clear incident response protocols

As technology evolves, criminals adapt quickly. Businesses must continuously review and strengthen their security measures to stay ahead.

5/19 FINTECH LATVIA: A homeplace for global Fintech Business

EVENTS

5/19 FINTECH LATVIA: A homeplace for global Fintech Business

The Investment and Development Agency of Latvia, accompanied by Latvian Minister of Economics, Viktors Valainis, and the Director of the Investment and Development Agency of Latvia, Ieva Jāgere, will hold an event in Tokyo at FINOLAB, a leading fintech center in Japan, on May 19 (Monday).

The event will feature the Latvian Minister and accompanying delegates from the Latvian fintech industry, including representatives from “FINTECH LATVIA,” the Latvian Blockchain Association, and various fintech-related organizations in Latvia.

Latvia: A Nordic Country Leading Social Transformation through Public-Private Collaboration

Latvia, a small country with a population of 1.9 million located in the center of the Nordic and Baltic countries, has been promoting advanced social transformation through public-private collaboration. This includes initiatives like establishing the world’s first startup law, advancing digital and data-driven social change led by the government, and effectively leveraging private sector initiatives as public services. Latvia has been at the forefront of developing infrastructure for 5G technology in Europe, driving digital transformation (DX), and leading international cooperation frameworks.

Latvia: A Key Destination for Global Business Services (GBS) Essential for Startup Scale-ups

The capital city of Riga has historically played an important role as a hub for global trade and culture, dating back to the Hanseatic League and the Imperial Era. In recent years, its significance has increased due to globalization, particularly in the area of Global Business Services (GBS), which provides a one-stop framework for services such as language support, legal, tax, HR, and customer services across the region. Latvia has become a key destination for startups, particularly in Europe and EU-adjacent countries, offering low-cost, high-quality services essential for businesses to comply with local regulations and secure talent.

Latvia: A Pioneer in the Introduction of the MiCA License for the Crypto Asset Market in the EU

Latvia was one of the first EU member states to introduce the MiCA (Markets in Crypto-Assets) license for crypto asset operations. The cost of obtaining and maintaining this license is among the lowest in the EU. Many major fintech companies have recognized the high value of establishing operations in Latvia to benefit from the MiCA license and are relocating or establishing offices in the country. Additionally, the Latvian Central Bank provides a regulatory sandbox that allows emerging companies and project teams to cooperate with the bank and develop new business models and services before entering the financial market or expanding their operations in the EU.

During this event, we will introduce the MiCA regulation, Latvian government incentives for fintech companies, and offer opportunities for networking between Latvian and Japanese companies. We look forward to your participation.

Apply for tickets


◆Schedule ：2025/5/19（Monday）18:00-20:30

◆Venue ：FINOLAB Event Space
　 　　　　　Otemachi Bldg 4F, Otemachi 1-6-1 , Chiyoda, Tokyo, 100-0004　Japan

◆Participation Fee：Free

◆Agenda

17:45-18:00 Reception
18:00-18:20 FINOLAB: Welcome and Introduction of the Business
18:20-18:25 Greeting from the Investment and Development Agency of Latvia
18:25-18:40 FINTECH LATVIA: Introduction to the Latvian Fintech Industry and Business Opportunities
18:40-18:55 LATVIA BLOCKCHAIN ASSOCIATION: Presentation of Business and Support Activities
18:55-19:15 Pitch Session from Latvian Fintech and IT Companies
19:15-20:30 Networking

＊The main language will be English, but simultaneous translation will be available for the networking session in both Japanese and English.

＊Light refreshments will be provided during the networking session.

Participating Latvian Companies/Organizations

・FINTECH LATVIA https://fintechlatvia.eu　

フィンテックラトビア協会は、ラトビアのフィンテック分野で活躍する⾰新的な⾦融サービスプロバイダーを結集しています。本協会の⽬的は、フィンテック業界における⾦融サービス提供者を結集し、その利益を国内および国際的な舞台で代表し、実現することを保証するとともに、ラトビア⾦融セクターの持続可能な発展と成⻑を促進することにあります。 本協会の使命は、フィンテック企業やノンバンクのサービス提供者がもたらす成⻑の可能性を尊重しながら、消費者と市場監督機関双⽅から⾼く評価される、信頼性、責任感、そして⻑期的な視点に基づいた業界慣 ⾏を確⽴することです。

・The Latvian Blockchain Association https://lbaa.io

ラトビアブロックチェーン協会（LBAA）は、ブロックチェーンの導⼊、イノベーション、そして連携を推進することにより、ラトビアを欧州連合における主要なWeb3ハブとして確⽴するために積極的に活動する⾮営利団体です。製品/サービス： LBAAは、欧州連合におけるMiCAライセンス取得に関する相談⽀援を提供しており、ブロックチェーン関連企業にとって友好的な規制環境を整備するため、政府機関との関係を育成する上で重要な役割を担っています。

・Latvian IT Cluster https://www.itbaltic.com

ラトビア ITクラスターは、ラトビア国内の 80を超える活発かつ⾰新的なIT企業を連携させ、各社の事業拡⼤とコミュニティ全体の成⻑を⽀援するとともに、地域欧州デジタルイノベーションハブとしての専⾨知識と地位を活⽤して、ラトビアにおけるデジタルトランスフォーメーションを推進する組織です。

製品/サービス：

– ラトビアにおけITおよびDX分野での、公共部⾨、⺠間部⾨、学術部⾨間のエコシステム構築。
– 企業および組織向けのDXサービス。
– 広範なネットワークを活かし、ラトビア企業の欧州連合域内および域外への輸出を⽀援いたします。また、国際的な会議や貿易ミッションへ の参加を⽀援します IT、デジタルトランスフォーメーション、そしてイノベーションの分野において、ヨーロッパ全域で展開可能な⼤規模プロジェクトを実⾏します。
– ニーズに合わせたミナーやワーキンググループを通じて、メンバーの専⾨能⼒を向上させます。

・JEFF https://www.jeff-app.com

JEFF社は主に、伝統的な⾦融データに関して人工カバー率が低い、⼤規模で急速に成⻑している新興市場に焦点を当てています。JEFFは、消費者のデジタル上での活動履歴に焦点を当て、データサイエンスとAIを活⽤することで、⾦融商品やサービスの申し込みが最終的に取引成⽴に⾄る確率を⾼め、⾦融包容を推進します。これにより、消費者と銀⾏、貸付業者とフィンテック企業間の最適なマッチングを実現します。東南アジアの市場において、800万⼈以上のクライアントにサービスを提供してきた確かな実績を踏まえ、より広い地域への展開を⽬指しています。

・IDT Media https://magebit.com

IDT Media社のブランドであるMagebitは、eコマースに特化したフルサービスのエージェンシーです。Magebitは、3つの⼤陸にわたる150名以上の⾃社専⾨家チームにより、お客様のオンラインストアを全く新しい⾼みへと引き上げる準備ができています。主な製品・サービス：オンラインショップの開発、メンテナンス、サポート。

・Copy Brain https://copybrain.app

Copy Brainは、ソーシャルメディアコンテン ツのローカライズを⾃動化するAIエージェントです。様々な⾔語やプラットフォームに対応し、翻訳、吹き替え、コンテンツの調整を効率的に⾏います。このAIエージェントは、コンテンツの⾃動収集、声質の再現、50以上の⾔語への吹き替え機能に加え、プラットフォームのアルゴリズム（Instagram, TikTok, YouTubeなど）に最適化された動画作成を⽀援し、⾃然で質の⾼いローカライズを実現します。コンテンツクーリエイター、企業、代理店は、⼿動翻訳と吹き替えなしでグローバルな視聴者にリーチでき、コストを削減し、リーチを最⼤化できます。

主な製品&サービス：

– 魅⼒的なSNSコンテンツのアイデア⽣成
– AI駆動型コンテンツ⽣成ツール
– スクリーンショットによるソーシャルメディアプロフィールの分析

イベント内容・プログラムは都合により一部変更させていただくことがございます。 予めご了承ください。

Apply for tickets

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Registration information will be managed according to the Privacy Policy(プライバシー ポリシー) of Peatix Japan Inc. Additionally, this information may be provided to FINOLAB, which operates FINOLAB. The Privacy Policy of FINOLAB Inc. can be found here.

※Event Information Notice
Participants who register for this event may receive information regarding future events held by FINOLAB or events organized by FINOLAB, sent to the email address provided during registration. If no objection is made, it will be considered that you have consented to receiving these notifications. Thank you for your cooperation.

[Summary] Scandals Continuing in Financial Institutions: Strengthening Internal Crime Prevention

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FINOLAB COLUMN

[Summary] Scandals Continuing in Financial Institutions: Strengthening Internal Crime Prevention

（Original article in Japanese was published for FinTech Journal on Mar. 13, 2025）
https://www.sbbit.jp/article/fj/159244

Financial institutions rely on trust, yet cases of embezzlement, fraudulent loans, and insider trading continue to emerge. Despite various preventive measures, compliance alone is not enough to stop internal misconduct. This article explores the root causes of internal crimes and the necessary steps for financial institutions to strengthen prevention.

Noticeable Scandals and Their Impact

Recent cases, such as embezzlement from safety deposit boxes by veteran employees, highlight severe reputational risks for financial institutions. Scandals not only erode customer trust but also impact financial firms’ appeal in employment rankings. Although banks allocate resources to address misconduct, their effectiveness remains questionable.

How Financial Institutions Respond to Internal Crimes

Japan’s Financial Services Agency (FSA) mandates banks to report misconduct within 30 days, but ineffective internal controls can allow fraud to go undetected. Many institutions publicly disclose scandals, with a typical protocol, including apologies, commitments for cooperating with law enforcement, incident details, accountability measures, and preventive steps.

Common Elements in Fraud Prevention Strategies

A review of multiple cases shows three key areas of preventive measures:

  • Strengthening Corporate Governance – Establishing independent audit committees, enhancing board expertise in legal and financial crimes, and improving whistleblower systems.
  • Enhancing Risk Management & Internal Controls – Creating independent risk departments, conducting frequent internal audits, and implementing regular compliance checks.
  • Cultivating a Compliance Culture – Enforcing ethical standards, mandatory compliance training, and revising incentive structures to promote long-term sustainability.

Why a Shift from Stereotype Notion Is Needed

Even with strict governance, internal crimes persist. Institutions assume employees are trustworthy, yet fraud cases indicate that some individuals will inevitably exploit the system. The focus should shift to early detection and rapid response, ensuring misconduct is addressed swiftly to minimize damage.

Internal Fraud Detection based on Evil Human Nature

Given the limitations of manual audits, financial institutions are turning to AI-powered fraud detection to maintain fair oversight:

  • Fraud Detection Systems – AI analyzes employee transaction patterns in real time, flagging unusual activities.
  • Employee Activity Monitoring – AI detects suspicious log activity and alerts management.
  • Access Control Management – Restricts unnecessary data access and prevents external data leaks.

AI-Powered Initiatives in Japan

  • Mitsubishi UFJ Bank introduced AI-driven AML (Anti-Money Laundering) checks.
  • Mizuho Financial Group’s Blue Lab developed “AiHawk Filter”, an AI audit system detecting fraud risks in emails and documents.

The Reality: Fraud Can’t Be Eliminated, Only Minimized

Despite various preventive measures announced by financial institutions, internal fraud cannot be entirely eradicated. The most practical approach is to detect fraud early and minimize losses. Moving forward, financial institutions must reduce reliance on manual monitoring and accelerate technology-driven fraud prevention efforts.

[Summary] Amendment to the Payment Services Act (2025) – Summary of Key Points | FinTech Topics #114

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FinTech Topics

[Summary] Amendment to the Payment Services Act (2025) – Summary of Key Points | FinTech Topics #114

（Original Video in Japanese was published on the FINOLAB CHANNEL on Mar. 25, 2025）

Evolution of the Payment Services Act

Before diving into the details of the latest amendment, let’s take a quick look at the evolution of the Payment Services Act since its enactment in 2009:

  • 2009: A new category called “funds transfer business” was introduced, allowing non-banking entities to engage in remittance services.
  • 2016: With the rise of Bitcoin and other virtual currencies, a registration system for cryptocurrency exchanges was introduced.
  • 2019: The term “virtual currency” was changed to “crypto assets,” and regulations on exchanges were tightened. To protect users’ assets, offline (cold storage) management became mandatory.
  • 2022: Regulations were introduced to accommodate stablecoins as a payment method. The transfer limit for funds transfer businesses was raised, and a three-tier licensing system (Type 1, Type 2, and Type 3) was established.

These amendments reflect the industry’s response to technological advancements and emerging use cases.

Key Points of the 2025 Payment Services Act Amendment

The main aspects of the amendment, which was approved by the Cabinet in March 2025, include the following:

1. Introduction of Domestic Asset Retention Orders for Crypto Asset Exchanges

Previously, there was concern that crypto asset exchanges handling spot transactions could transfer their assets overseas. The amendment allows the government to issue asset retention orders to prevent such outflows.

2. Flexible Management Requirements for Trust-Based Stablecoin Reserves

Previously, stablecoin issuers were required to hold reserves in full as demand deposits. The amendment allows issuers to hold up to 50% of their reserves in low-risk assets such as government bonds or redeemable term deposits. This change is expected to enhance the international competitiveness of stablecoins issued in Japan.

Although no registration was permitted  for stablecnin operator after the new regulation in 2022, SBI VC Trade, part of the SBI Group, has become the first company in Japan to register for handling stablecoins. It plans to offer USDC, issued by Circle.

3. Establishment of a Brokerage Category for Crypto Asset Transactions

Until now, entities engaging only in mediating crypto asset transactions were required to register as full-fledged exchanges, creating high entry barriers. The amendment introduces a new brokerage category, allowing intermediaries to operate under a separate, more appropriate regulatory framework. This change aligns with financial regulations in other sectors and is expected to promote new service providers.

4. Regulation of Cross-Border Payment Collection Services

Recent regulatory changes now impose rules on cross-border payment collection services, which were previously unregulated. While these services do not require a funds transfer business license under the current framework, some have been misused for illegal activities such as online gambling and investment fraud. To address these risks, new regulations have been introduced.

  • The new rules aim to crack down on unregistered operators involved in illegal fund transfers. For services with higher risks, additional regulations will enhance consumer protection and strengthen anti-money laundering (AML) measures.
  • Cross-border payment collection services that do not directly facilitate product or service transactions will now be subject to funds transfer regulations. However, low-risk services—such as platforms directly involved in transactions or escrow services—may be exempt if they are already regulated under other laws.

Some industry groups, including the Japan Association of New Economy, have raised concerns that excessive regulation could harm digital payment services. They urge policymakers to ensure that the new rules are focused on actual risks and do not disrupt existing ecosystems like e-payments and point-based settlements. As the final details of these regulations take shape, it will be important to monitor their impact on businesses and innovation.

5. Faster Refund Process for Users in the Event of a Funds Transfer Business Failure

Previously, even when funds transfer businesses secured user assets through bank guarantees or trusts, refunds were processed through a government-led procedure, taking at least 170 days. The recent amendment introduces direct refund options, allowing banks and trust companies to return funds to users without going through the traditional process. This change enhances consumer protection and ensures faster access to funds in the event of a business failure, improving the overall efficiency of financial services.

Future Outlook

The 2025 amendment is expected to:

  • Reduce the burden on stablecoin issuers, promoting stablecoin adoption in Japan.
  • Lower barriers to entry for crypto asset intermediaries, expanding financial business opportunities.
  • Introduce new regulations for cross-border collection services, with ongoing discussions on implementation details.

As the regulatory framework continues to evolve, stakeholders will be closely watching the government’s next steps, including specific regulations under ministerial ordinances.

[Summary] Diversification of Online and Mobile Banks: Leveraging BaaS and New Industry Entrants | FinTech Topics #113

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FinTech Topics

[Summary] Diversification of Online and Mobile Banks: Leveraging BaaS and New Industry Entrants | FinTech Topics #113

（Original Video in Japanese was published on the FINOLAB CHANNEL on Feb. 10, 2025）

This article summarizes the FINOLAB CHANNEL’s FinTech Topics #113 video, which discusses the diversification of online and mobile banks in Japan, focusing on the utilization of Banking as a Service (BaaS) and the entry of new business sectors into the financial industry.

The First Generation of Internet Banks

The video begins by noting that over two decades have passed since the emergence of the first generation of internet-only banks in Japan. These initial players, while some have rebranded, laid the groundwork for today’s digital banking landscape. These include Japan Net Bank (now PayPay Bank), Sony Bank, eBank Bank (now Rakuten Bank), Sumitomo SBI Net Bank (which actively promotes its BaaS platform under the name NEOBANK), and Jibun Bank (now au Jibun Bank).

The Second Generation and Mobile-Only Approaches

Following the initial wave, a second generation of online banks has emerged, often in collaboration with other financial institutions or as part of larger internet groups. These include Daiwa NEXT Bank (linked with Daiwa Securities), GMO Aozora Net Bank (part of GMO Group), Minna Bank (part of Fukuoka Financial Group), and UI Bank (part of Tokyo Kiraboshi Financial Group). Notably, some of these newer banks have adopted a mobile-only strategy, solely focusing on smartphone-based transactions.

Convenience Store Banks

Alongside these developments, major convenience store chains like Seven Bank, Lawson Bank, and AEON Bank have also established their own banks. While having ATM networks, these convenience store banks can be considered similar to online banks due to their lack of traditional branch networks.

Banking as a Service (BaaS) and NEOBANK

The discussion then shifts to Banking as a Service (BaaS), with Sumitomo SBI Net Bank’s NEOBANK highlighted as a key player. NEOBANK partners with various industries to create new banking services. Examples include JAL NEOBANK (with Japan Airlines), Takashimaya NEOBANK (with the department store, Takashimaya), Yamada NEOBANK (with electronics retailer chain, Yamada Denki), Dai-ichi Life NEOBANK (with Dai-ichi Life Insurance), SBI Securities NEOBANK, and SBI Remit NEOBANK.

Recent Developments in BaaS Partnerships

The video emphasizes significant developments in BaaS in the past 2 years, with new entrants from diverse sectors. These include:

  • Transportation: JRE Bank (a partnership between JR East and Rakuten Bank, launched in May 2024, offering railway-related benefits), and KEIO NEOBANK (a collaboration between Keio Corporation and Sumitomo SBI Net Bank, from Sep. 2023, providing services linked to Keio Passport card membership and benefits along the Keio railway lines).
  • Real Estate: Hebel Haus NEOBANK (a service from Asahi Kasei Homes and Sumitomo SBI Net Bank, launched in June 2024, tailored for residents of Hebel Haus, offering enhanced housing loan guarantees), and Yutaka Bank (a service from KI-Star Real Estate and Sumitomo SBI Net Bank, focusing on housing loans and KI Points), .
  • Energy: Katene Bank from Dec. 2024 (a partnership between Chubu Electric Power and Sumitomo SBI Net Bank, offering benefits like housing loan discounts and points for electricity/gas usage), and a planned collaboration between Kansai Electric Power, UI Bank, and Kiraboshi Group to create a new bank focused on zero-carbon initiatives, where deposits will fund environmentally friendly projects and offer eco-friendly housing loans.

Digital Banks for Small and Medium-sized Enterprises (SMEs)

The video also introduces the concept of digital banks specifically targeting SMEs, such as the planned 01 Bank. This initiative by Ikeda Senshu Bank, a regional bank from Osaka, utilizing GMO Aozora Net Bank’s BaaS platform, aims to launch in fiscal year 2024 with significantly lower initial investment compared to first-generation online banks. 01 Bank intends to integrate with various cloud services used by SMEs (e.g., accounting, expense management) to streamline financial operations and create a compelling banking service.

Key Trends and Future Outlook

The video concludes by highlighting several key trends:

  • Evolution of branchless banking: New online/mobile banking services prioritize smartphone applications.
  • Lower entry barriers: BaaS significantly reduces the initial investment required to launch a digital bank.
  • Diversification of BaaS providers: The BaaS landscape is becoming more competitive, with multiple online/digital banks offering these services.
  • Synergy with core businesses: New entrants are increasingly focused on creating synergies between their existing businesses and their banking services to offer unique value propositions to customers.
  • Impact of rising interest rates: The return to a world with interest rates allows banks to differentiate their services more effectively.

Overall, the Japanese online and mobile banking sector is experiencing significant diversification driven by the adoption of BaaS, enabling companies from various industries to enter the financial services market and offer tailored banking solutions to their customer bases.

[Summary] JR West’s “All-in-One” Payment Service “Wesmo!”—Its Three Strategic Goals, Challenges, and Prospects

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FINOLAB COLUMN

[Summary] JR West’s “All-in-One” Payment Service “Wesmo!”—Its Three Strategic Goals, Challenges, and Prospects

（Original article in Japanese was published for FinTech Journal on Jan. 6, 2025）
https://www.sbbit.jp/article/fj/156810

JR West will launch “Wesmo!” in Q1 of fiscal year 2025, an ambitious cashless payment and wallet service integrating various financial functions. This move reflects a growing trend of railway companies expanding into financial services.

What is Wesmo! and JR West’s Financial Expansion? (Source: JR West Press Release)

What is Wesmo!?

Announced on January 21, 2025, Wesmo! aims to enhance daily and business transactions. JR West, the first railway operator registered as a Type II Funds Transfer Service Provider, offers:

For Individual Users

  • Charge Function: Load funds via bank accounts, Seven Bank ATMs, or J-WEST Cards.
  • Money Transfer: Peer-to-peer transactions among users.
  • Point Integration: Earn and use WESTER Points across ICOCA and J-WEST Card services.

For Merchants

  • Low-Cost Payment Solution: “BLUE Tag Touch” with zero setup cost and a 1.9% transaction fee.
  • Fast Revenue Collection: Next-day settlements.
  • B2B Transfers: Free supplier payments to improve efficiency.

Payment Methods

  • BLUE Tag Touch: Tap to pay via smartphone.
  • QR Code Payment: Alternative for stores without BLUE Tags.

Launch Timeline & Future Features

Merchant recruitment began in January 2025, with planned expansions including:

  • ICOCA Charging: Direct top-ups via the Wesmo! app.
  • Digital Salary Deposits: Pending government approval, offering payroll integration.

Strategic Goals

  1. Higher-Value Transactions: Competes with QR code and credit card payments, supporting transactions up to ¥1 million.
  2. Expanded Transfer Capabilities: Unlike Suica, Wesmo! enables peer-to-peer transfers but imposes limits based on identity verification level.
  3. Aggressive Merchant Acquisition: Competitive transaction fees (1.9% vs. PayPay’s 1.98%) and next-day payouts enhance merchant appeal.

JR West’s Other Financial Activities, Digital Bonds

In June 2024, JR West issued “WESTER Bonds” using blockchain, engaging investors with loyalty rewards and exclusive perks, reinforcing ties with customers beyond traditional railway services.

Railway-Finance Synergy

Railway and airlines are increasingly integrating financial services:

  • JR East: Launched “JRE Bank” in 2024, offering up to 40% Shinkansen fare discounts.
  • Keio Corporation: Introduced “KEIO NEOBANK” in 2023.
  • Airlines: JAL and ANA have integrated banking and payment services.

However, nationwide adoption may take some time; Suica and ICOCA interoperability took a decade, making Wesmo!’s broader expansion a long-term challenge.

Challenges & Prospects

Wesmo! offers comprehensive features but faces a saturated cashless payment market. With 9 million Wester members, JR West has a solid foundation, yet widespread adoption will take some time. Additionally, differing strategies within the JR Group may hinder nationwide implementation.

While Wesmo! is well-positioned for success, overcoming competition and scaling effectively will be crucial for long-term sustainability.

[Summary] The Digitalization of End-of-Life Planning – Addressing the Needs of a Super-Aging Society | FinTech Topics #112

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FinTech Topics

[Summary] The Digitalization of End-of-Life Planning – Addressing the Needs of a Super-Aging Society | FinTech Topics #112

（Original Video in Japanese was published on the FINOLAB CHANNEL on Jan. 15, 2025）

Japan’s Growing Need for Digital End-of-Life Planning

With Japan’s rapidly aging population, end-of-life planning (終活, shūkatsu) is becoming increasingly important. By 2025, one in five people in Japan will be over 75, bringing significant challenges in pensions, healthcare, and caregiving. Traditionally, end-of-life planning focused on funeral arrangements and inheritance, but in recent years, it has expanded to include personal reflection, life organization, and most notably—digital assets.

The Rise of Digital End-of-Life Planning

As financial transactions and social interactions move online, digital legacy management has become a growing concern. Many elderly individuals now use the internet, with about half of those in their 70s actively online. However, digital assets—ranging from online banking accounts and subscription services to social media profiles and cryptocurrency holdings—can be difficult for family members to manage after one’s passing.

Without proper planning, families may struggle to access or even become unaware of valuable digital assets, leading to financial loss or the continuation of unnecessary subscription fees. This has created a demand for digital solutions that help organize and transfer digital assets effectively.

Common Challenges in Managing Digital Assets

Key issues that arise after an individual’s passing include:

  • Inaccessible Online Accounts: Without passwords, families cannot access social media, email, or banking services.
  • Unclaimed Digital Assets: Cryptocurrencies, e-money, and other digital financial holdings may go unnoticed.
  • Ongoing Subscriptions: Services linked to credit cards (e.g., streaming, cloud storage) may continue to charge fees indefinitely.
  • Legal Complexities: Navigating inheritance laws for digital assets is often more complicated than for physical property.

How to Prepare for Digital End-of-Life Planning

The National Consumer Affairs Center of Japan recommends the following steps to ensure a smooth digital inheritance process:

  • Document Important Passwords Securely: Write down smartphone, email, and key account passwords and store them in a secure location. However, be cautious about security risks.
  • Organize Account Information: List all active online services, including social media, subscriptions, and financial accounts.
  • Create an “Ending Note”: A document that outlines what should happen to digital assets and personal belongings after passing.
  • Appoint a Trusted Contact: Designate a family member or close friend who can access important accounts when necessary.

Emerging Digital Solutions for End-of-Life Planning

To address these challenges, various digital services have emerged in Japan, offering solutions for managing and transferring digital assets:

  • tayorie: Sends pre-written messages and important information to designated recipients when specific conditions are met, ensuring that vital details reach the right people.
  • Yuigon Net（遺言ネット）: A service supervised by legal professionals to help users create digital wills and organize end-of-life documents.
  • Digital Legacy Services by J-Factory: Assists with retrieving, organizing, and securely disposing of digital data.
  • Digital Keeper: Enables individuals to securely store and transfer login credentials and digital assets to their families.
  • SonaSapo（そなサポ ）： A real estate-related service supporting seamless inheritance processes via a digital platform.
  • SMBC Digital Safety Box: A digital vault that allows users to store important documents and instructions for their heirs.

Future Outlook and Challenges

As digital transformation accelerates, the need for structured end-of-life digital asset management will continue to grow. Additionally, as Japan experiences a rise in single-person households, new services will be required to address cases where there are no immediate family members to manage digital legacies.

The digitalization of end-of-life planning is still evolving, but the demand for secure, user-friendly solutions will only increase. It is crucial for individuals to start organizing their digital assets early, ensuring a smooth transition for their loved ones.