The rationale is to make it easier for banks to take stakes in fintech firms, thereby spurring the lending sector to drop its outdated business model and embrace new technologies.
Japanese bank holding companies currently need Financial Services Agency approval to acquire an interest of greater than 15% in non-financial companies. The government plans to ease this requirement so that banks will simply have to report their investments in fintech companies to the FSA, instead of receiving approval in advance. The proposal would also make it easier for banks to start new services based on customer data by easing the rules that require systems development and advertising subsidiaries to generate at least half their sales from bank-related operations. The ruling party taskforce will soon compile a proposal, with the aim of having it incorporate into a national growth strategy due out in June. The aim is to submit a revision to the banking act to the parliamentary session convening in January next year.