Governor Kuroda spoke at the Bank of Japan’s first FinTech Forum, in a speech discussing the significant role FinTech innovation plays in driving the development of financial services.
Kuroda dedicated a large amount of his speech to the importance of information security. He made no mention of Japan’s current economic situation and the BoJ’s position on monetary policy.
BoJ wants to support country’s developments in FinTech
The BoJ’s first FinTech Forum was designed to promote the development of new, alternative financial services, and attended by business leaders and experts from around the world. Participants included IT enterprises, retailers and start-up companies.
In his speech, Governor Kuroda promoted the FinTech sector as an important driver of economic activity and user-welfare in financial services. He commented: “FinTech has a wide influence on payments, settlements and financial services, and could stimulate various economic activities, including e-commerce and ‘sharing economy’ businesses.” Kuroda signalled that the BoJ is looking to make use of FinTech services in their own operations in the future.
Information security presents a vital issue
A large part of his speech was dedicated to the importance information security. Mentioning the February Bangladesh Bank heist, in which cyber thieves stole $81 million from Bangladesh’s central bank, he also highlighted the opportunities that innovations in FinTech present for hackers and cyber-attacks, which need to be addressed.
Kuroda stated: “FinTech will thrive and grow when users associate it not only with convenience but also with safety and trust.”
Japan is finally catching up in the FinTech innovation race
Japan’s FinTech industry trailed far behind developments in the US and Europe until last year. However, since 2015, investment in start-ups in the FinTech industry more than doubled, to US$141.73 million. This year the industry continues along its exponential growth path.
The Bank of Japan has started to take great interest in the country’s FinTech developments this year. In April, the Bank established its “FinTech Centre”, within the Payment and Settlement Systems Department, to actively take part in the innovation in alternative financial services. The Centre was further complimented by the “FinTech Network”, tasked with distributing and collecting information across the sectors of the Central Bank.
Governor Kuroda said in today’s forum: “The Bank of Japan is ready to lead research and analysis on FinTech, in view of the possibility that the Bank itself may apply FinTech technologies to its operations in the future.”
Kuroda left BoJ’s monetary policy intentions unmentioned
Comments on the wider economic situation of Japan were noticeably missing, despite the failures of Kuroda’s sizeable program of quantitative easing which began in 2013.
In its latest monetary meeting at the end of July, the bank responded to the UK’s Brexit vote with a new record stimulus package. However, many experts worry that the BoJ will soon reach its limit on current expansionary measures as the bank is running out of assets to buy.
The next monetary policy meeting will be held on the 21st and 22nd September, with analysts and economic agents looking for clues as to how the BoJ will proceed in its fight to stimulate the Japanese economy.
Katharina Fleiner 23/08/2016
