Re-inventing lending in Japan through new-age technology

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Re-inventing lending in Japan through new-age technology

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“It is an axiom nowadays that no bank fails for lack of capital; unprofitable lending is always the underlying cause.” — James Grant, author- ‘Money of the Mind’.


Over the past couple of decades, competition among lenders has been fierce and this only seems to be increasing with every passing day. In order to retain existing customers and acquire new ones, banks have to continuously innovate the way they operate and out-innovate the competitors. This is important not only to increase their efficiency and reduce operational costs, but also to be customer-centric in their approach. On those lines, Mobility and Analytics have been revamping the way retail banking operates globally.


Banks in Japan have been facing a lot of challenges such as margin pressures (lending interest rate ~1%), flat credit demand and intense competition. Hence, many Japanese financial institutions have started to venture into South East Asian markets. Further, customer expectations have sky-rocketed due to the ease and immediacy of smartphone interaction.


A Global Consumer Banking survey conducted by E&Y stated that in Japan, branch proximity and poor customer service are the primary reasons for customer attrition. 36% of customers who decided to change their bank cited the lack of proximity of branches. 23% blamed general levels of service quality. Japanese customers received the lowest level of personalized service out of all countries surveyed. 45% customers state that they received no personalized attention.


Given these setbacks, a well-executed mobility and analytics strategy can act as an enabler for the Japanese banks in offering differentiated services to their customers.


Banks have taken several steps to acquire more customers and increase customer base. Mobile Banking solutions help in acquiring more business by providing better access to dealers and enabling bank employees operate from remote locations, reducing Turn-Around-Time (TAT). Meanwhile with analytics, accurate customer segmentation leads to targeted marketing effort, which in turn results in lower cost of customer acquisition. It also aids in unearthing cross-sell and up-sell opportunities to existing customers.


Mobility empowers the bank customers to operate anytime anywhere thus reducing call centre cost. These instant services indirectly aid banks in enhancing customer satisfaction. Predictive analytics helps bank to make better decisions by arriving at rational conclusions that are predominantly data-driven. It facilitates customer retention, segmentation and fraud detection among others. It assists businesses to better understand consumer behaviour resulting in superior delivery of service and enhanced customer experience.


Data driven business strategy of analytics helps in finding patterns of customer behaviour and deriving insights by visual exploration of data.


Building an Omni-channel environment across physical and digital touch-points will instigate ‘pervasive- banking’- Anytime, Anywhere and Anyhow. Combining the ubiquity of mobility along with the potential of analytics, will help financial institutions reinvent their way of operation, thus building an ecosystem for truly disruptive enterprises.


Nucleus Software offers FinnOne Neo Mobility suite comprising customer acquisition, loan operations, collections and customer self-service function. Seamless integration with the base system, real time data synchronization, faster time to market and cross channel operation are some of the unique benefits of the suite.


Nucleus offers a comprehensive Predictive and Prescriptive Analytics offering across credit, risk, collection and marketing for leading financial institutions & banks. Some of the key business values of our Predictive Analytics product are:


  • End to end deployment and monitoring of credit scoring
  • Identification of the target segments for focused and optimized marketing campaigns
  • Identification of optimal channels to reach these segment
  • Accurate collection scorecards for predicting roll rates
  • Effective collection strategy based on scorecards and an interactive dashboard
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About Nucleus

At Nucleus Software we are committed to providing efficient, modern yet proven software solutions for the global Banking and Financial Service industry. We have been pioneers in developing Retail Banking Software, Corporate Banking Solutions, Transaction Banking, Cash Management and Internet Banking Software since 1986. Our success spreads across more than 50 countries, and we serve our customers globally through our direct and partner operations across US, Europe, Asia-Pacific, Africa and the Middle East. We are known for our world-class expertise and innovation in lending and transaction banking technology. Our two flagship products, built on the latest technology are: FinnOne™ and FinnAxia™.