26 Jul 23
Transforming for wealth management in Japan
Building the digital capabilities to succeed
The financial assets of Japanese individuals total JPY 2,005 trillion (USD 14.4 trillion), with over half held in cash. Rising inflation and regulatory changes present opportunities for diversification and modern wealth management. With an aging population and wealth gradually shifting to the next generation, the time is ripe for financial institutions in Japan to embrace digitalization and tap into this potential.
Download our report to discover how financial institutions can leverage digital capabilities to succeed in Japan’s evolving wealth management landscape.
70%
or more of wealth in Japan is held by those over the age of 60
Source: Financial Services Agency
2x
cash is held by Japanese households compared to those in Germany and the UK
Source: OECD
4.2%
for Japan's core Consumer Price Index in January 2023 marked a 41-year high
Source: Reuters
Building new digital capabilities for evolving needs
While the wealth management sector in Japan still relies heavily on human interaction, digitalization has been gaining momentum. Mega bank groups and major securities firms are leading the way, but there is room for improvement along the entire value chain. Financial institutions need to re-evaluate their models and processes, leveraging technology to enhance efficiency and client experience. By streamlining operations and embracing digital solutions, they can better serve their clients and stay ahead in a rapidly changing landscape.
At Avaloq and NEC, we believe that the digital journey for financial institutions in Japan should vary depending on their stage of technology development for the wealth management business. For financial institutions looking to establish or modernize their wealth management business, it is essential to set up a robust backbone for back-to-front office operations, forming the foundation of their digital journey. For those looking to extend their wealth management and private banking offering, digital front-end and investment platforms are crucial to accelerate sales and client interaction.
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“The financial assets of Japanese individuals are said to amount to JPY 2,000 trillion, more than half of which is held in bank deposits and cash. As a result, while household financial assets have tripled in the US and increased 2.3 times in the UK over the past decade, in Japan they have increased only 1.4 times. This is a waste—but also a source of future potential.”
Former Prime Minister Kishida Fumio, London, 2022
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