Japan's Private Banking Industry: The Competition
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Code : COM0111
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Region : Japan
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Introduction:Japan is one of the fastest growing markets for private banking in Asia. For many years the concept of private banking had been alien to the Japanese. It was Citibank that first provided private banking services to the Japanese from the year 1986. Since then other foreign financial institutions also began to provide these services to their customers. These institutions primarily faced competition fromthe postal savings institution. As a result, they recorded low profits from their private banking operations in the 1990s. But Citibank was an exception. Though itwas the first bank that could carve a niche for itself in the private banking services in Japan, it had to close down after Financial ServicesAgency [FSA] found the bank guilty of violating rules and regulations. After Citibank's withdrawal from the private banking industry of Japan, the competition among other key players intensified. Many banks have begun to consider private banking in Japan as a nichemarket with high potential. To take advantage of the wide opportunities, some financial institutions started to provide private banking services to their customers, while the existing banks improved their services to attract the high net-worth individuals. These institutions anticipate that the ongoing reforms undertaken by the Japanese government including the privatisation of postal savings institution by the year 2007 would help them to improve their private banking operations in the country. Apart from the high net-worth individuals, successful entrepreneurs and baby boomers are the current target of the private banks. |
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