一般社団法人 東京国際金融機構(FinCity.Tokyo)

FY2021 Monthly Market Report vol.5 –December 2021

Launch of the Financial Service IntermediaryBusiness
In June 2020, amendments to the law concerning the creation ofintermediaries that can provide one-stop service in multiple industries(banking, securities, and insurance) were enacted, which took effect inNovember 2021. This allows for the intermediary business in all areas ofbanking, securities, and insurance with a single license of Financial Services
Intermediary Business, enabling FinTech companies to expand their customer
service. This report outlines the overview and background of the amendments
and discusses the opportunities that the amendments may bring to foreigncompanies.
(Table of Contents)
1.
Overview of the financial service
intermediary business1-a. Overview
1-b. Background1-c. Developments related to the law
enforcement
2.

Potential opportunities for foreigncompanies

2-a. Business opportunities for FinTech
companies
2-b. Potential business opportunities
3.

Related links

1. Overview of the financial
service intermediary business1-a. Overview⚫ The "financial service intermediarybusiness" refers to intermediaries that,under a single license, "provide a onestop service for a wide variety of
products and services offered bymultiple industries and multiple financialinstitutions."⚫ Amendments were made to optimize theprovision of one-stop services, such as
making it possible to offer intermediaryservices in all areas of banking,securities, and insurance, only with asingle license, unlike the existing
intermediary business, which wasvertically divided by business category.

Products and services that the financial
services intermediaries can offer
Banking

Securities

Insurance

Available

Savings
account,Mortgage
loans

Government
bonds, Listed
stocks,Investment
trusts

Personal
accident
insurance,
Travelinsurance, Golf
insurance

Notavailable

Structured
depositUnlistedstocks,Derivatives
instruments

Variableinsurance,
Foreigncurrency
denominatedinsurance

1-b. Background⚫ Due to the need to obtain a license foreach type of business, the number ofintermediaries providing one-stop
service for all banking, securities, andinsurance to users was limited (Fivecompanies as of March 2020).
⚫ It has been difficult for financial service
users to choose the most suitable one
among various financial services, forcing
them to experience inconvenience.

1-c. Developments related to the law
enforcement
Enactment and enforcement of the“Financial Service IntermediaryBusiness”⚫ In June 2020, the Act on Sales, etc. of
Financial Instruments was renamed the"Act on Provision of Financial Services"and the "financial service intermediarybusiness" was launched.
⚫ The Act took effect on November 1, 2021.

Copyright: The Organization of Global Financial City Tokyo (FinCity.Tokyo)

December 22nd, 2021

一般社団法人 東京国際金融機構(FinCity.Tokyo)

FY2021 Monthly Market Report vol.5 –December 2021

Launch of the Financial Service IntermediaryBusiness
Two domestic companies registered as
the financial service intermediarybusiness operators⚫ Since after the enforcement of the act
on November 1, 2021, two companies
as follows have been registered as thefinancial service intermediary business
operators and started the business.
①SBI NEOMOBILE SECURITIES Co., Ltd.
⚫ SBI NEOMOBILE SECURITIES provides
more approachable asset building
services such as stock investment using
T Points (An incentive programme inJapan, which grants the awarding points
according to the amounts of purchasing
in affiliated shops etc.) and subscription
model pricing.
⚫ The company was registered as afinancial service intermediary business
operator on November 1, 2021, andlaunched operations on the following day.
As the first financial service intermediarybusiness operator in Japan, the company
offers insurance intermediary services
that accept application via the Internet.
② 400F INC.
⚫ Four Hundred Franc operates an online
money chat consultation platform, etc.

⚫ The company registered on November 1,2021, and began offering financial
products and services in December 2021,
after forming a partnership with SBI
SECURITIES Co., Ltd. for the financial
service intermediary business.
Accreditation of self-regulatoryorganizations, etc.
⚫ The Japan Financial Service
Intermediary Business Association wasestablished on April 22, 2021. The
association aims to promote and selfregulate the "financial service
intermediary business" with a view toachieving highly convenient financial
services, preventing unfair transactions
and system risks from materializing,and ensuring legal compliance and userprotection among the financial service
intermediary businesses operators.
⚫ On November 1, 2021, the Financial
Services Agency (FSA) accredited thisgeneral incorporated association as a
Certified Financial Service IntermediaryBusiness Association. As a result, theAssociation became an officiallyrecognized "self-regulatory organization,etc." as an industry organization thatengages in self-regulation, etc.

Intermediary business before and after the legislative revision (Image)
Approach from users① Traditional intermediary businessBanking

Securities

Insurance

BankingagencyserviceFinancial
instrumentsintermediaryserviceInsurance
agentsAffiliation

Partnership② Intermediary business after thelegislative revision
BankingSecurities

Insurance

Financial Service Intermediary BusinessBankingagency
serviceFinancialservice users

Copyright: The Organization of Global Financial City Tokyo (FinCity.Tokyo)

Financial
instrumentsintermediaryserviceInsurance
agentsFinancialservice users

December 22nd, 2021

一般社団法人 東京国際金融機構(FinCity.Tokyo)

FY2021 Monthly Market Report vol.5 –December 2021

Launch of the Financial Service IntermediaryBusiness
2. Potential opportunities forforeign companies
2-a. Business opportunities for FinTechcompanies
If FinTech companies themselves areregistered as financial serviceintermediary businesses operators⚫ Growing demand for platforms thatcan support the banking, securities,and insurance domains in a crosssectional manner
Traditionally, individual services havebeen provided for each domain such as
banking, securities, and insurance; but
there will be more business
opportunities for platformers who canhandle services across multipleindustries.
If FinTech companies provide services
to financial service intermediarybusinesses operators⚫ Increasing demand for developing
and providing services to new market
entrants
Opportunities to offer services tonewcomers to the financial service
intermediary business will arise inaddition to services to traditional
financial institutions.
⚫ Growing demand for services toaddress compliance risks
Opportunities will be created to provide
services that can address the compliancerisks associated with information linkage
by new entrants to the financial
intermediary business.

2-b. Potential business opportunities
Based on the products and services thatare approved under the Financial Service
Intermediary Business scheme as
mentioned in 1-a, the following arepotential examples of business that mayarise.
⚫ New business responding to financialneeds in daily life, such as providing
services allowing users to easily checkthe balance and income/expense of theirown deposit accounts throughsmartphone apps; introducing available
loans based on the financial needs andasset status of the users ascertained
through the smartphone app services;and comparing and recommending
financial services suitable for each user’slife plan
⚫ Services accommodating various
financial transaction needs for business,such as providing services to support theaccounting and tax payment proceduresof businesses through (cloud-based)accounting software and apps;
identifying the financial needs, etc., ofbusinesses based on the information ontransactions and finances obtained
through these services, conducting
credit screening using AI-based models,etc. and recommending suitable loan
products for the businesses from among
the loan products of multiple banks andmoney lenders; and proposing groupinsurance for employee benefits andnon-life insurance (liability insurance,etc.) to reduce business risks⚫ A business in which real estate agents
provide mortgages and earthquake
insurance along with propertiesCopyright: The Organization of Global Financial City Tokyo (FinCity.Tokyo)

December 22nd, 2021

一般社団法人 東京国際金融機構(FinCity.Tokyo)

FY2021 Monthly Market Report vol.5 –December 2021

Launch of the Financial Service IntermediaryBusiness
3. Related links
Supervisory authorities, industry
associations⚫ Financial Services Agency, Comprehensive
Supervisory Guidelines for Financial
Service Intermediary Business Operators(Japanese)
https://www.fsa.go.jp/common/law/guide/kinsa/index.html⚫ Japan Financial Service IntermediaryBusiness Association (Japanese)
https://jfim.or.jp/
Related laws, regulations, etc.
⚫ Act on Provision of Financial Services
http://www.japaneselawtranslation.go.jp/law/detail/?id=3741&vm=04&re=01&ne
w=1⚫ Order for Enforcement of the Act on
Provision of Financial Services
http://www.japaneselawtranslation.go.jp/law/detail/?id=2068&vm=04&re=01&ne
w=1⚫ Cabinet Office Order on Financial Service
Intermediary Business, etc. (Japanese)
https://elaws.egov.go.jp/document?lawid=503M600000
02035

Sources:
Financial Service Agency, Bill for Partial Amendment to the Act on Sales, etc. of Financial Instruments for the Purpose ofEnhancing Convenience and Protection of Financial Service Users, Mar. 2020 (Japanese)
https://www.fsa.go.jp/common/diet/201/01/setsumei.pdf
Financial Service Agency, List of licensed (registered) Financial Institutions, Nov. 2021
https://www.fsa.go.jp/en/regulated/licensed/index.html[First in Japan] SBI NEOMOBILE SECURITIES Launches the Financial Service Intermediary Business, Nov. 2021 (Japanese)
https://www.sbineomobile.co.jp/image/info/press_211101.pdf
PRTIMES, Partnership in Financial Service Intermediary Business is Launched with 400F INC., Nov. 2021 (Japanese)
https://prtimes.jp/main/html/rd/p/000000484.000007957.html
Japan Financial Service Intermediary Business Association, Japan Financial Service Intermediary Business Association is
Established, Apr. 2021 (Japanese)
https://jfim.or.jp/2021/04/22/日本金融サービス仲介業設立/
Japan Financial Service Intermediary Business Association, Japan Financial Service Intermediary Business Association Obtains
Certification, Nov. 2021 (Japanese)
https://jfim.or.jp/2021/11/01/news_release/

Copyright: The Organization of Global Financial City Tokyo (FinCity.Tokyo)

December 22nd, 2021