Creating New History of SMBC Group in America : An Inside Look at the People Taking On the Digital Banking Business

I heard that SMBC Group was considering launching a retail digital bank in America and it was recruiting people for it. I immediately volunteered and got involved in the project. For the continued growth of SMBC Group, we can’t rely on existing business alone. It is important that we take on the challenge of new businesses as well. So I’m happy to have this opportunity to participate in a project that will launch a digital bank from the ground up in the enormous U.S. market. I think there is great potential.

I had been providing support for this project from Tokyo. Compared to other new projects, the projections for Jenius Bank were quite high, both in terms of its potential size and its profitability. At first I was fairly skeptical about whether it was actually going to happen. Often with large projects that have high projections, it can be difficult to obtain the understanding of the relevant people, and I had struggled with this in the past. But I felt that the success of projects like Jenius Bank was what SMBC Group needed right now, so I proposed it to my boss at the time and got involved as a project member. I am very thankful my boss was on board with the idea.

I joined the team in July 2022 and am in charge of systems. Jenius Bank is competing with startups that are famous in Silicon Valley. At first, I was quite concerned about whether we could actually beat them, but in talking with Daisuke Tanaka, our group leader, and John Rosenfeld, who heads the digital bank, my thoughts on the matter have gradually changed. I recognize that this is one of the most challenging projects to be taken on by a major Japanese company, so I am absolutely committed to making it a success.

I returned to Tokyo from New York, where I had been assigned previously, and then I was assigned here. I am mainly in charge of cybersecurity. I’ll talk about the area I’m involved in, system cybersecurity. Banking systems of course have to be very robust, but the systems of a digital bank, along with robustness, need to be built taking advantage of the cloud environment in a way that enhances the user experience. This is where digital bank systems differ significantly from conventional systems. If we can establish best practices in the U.S., we would be able to apply them in other countries as well. We are eliminating physical branches and documents almost completely, so if regulatory hurdles can be cleared in individual countries, the project can be implemented in any location. In this sense, I feel the project has great potential and is very rewarding to be involved in.

So far in my career, while involved in planning banking business projects, I’ve always been interested in taking on new challenges. It was in this spirit that I took advantage of the opportunity to study abroad to earn an MBA, and while at a business school on the U.S. West Coast, I focused my studies on fields I thought were promising: fintech and entrepreneurship in particular. After graduating, I was assigned to New York, and was interested at that time, too, in getting involved in something innovative. I have been participating in this project since the conception stage. It originally started from a vision put forth by a small team of people who believed in this idea, but as the idea spread through this major company that is SMBC Group, more and more people got on board, people with passion immersed in the idea at all hours of the day, support within SMBC Group increased, and before long, we arrived at where we are today. Even now, we continue to grow at a rapid pace. I believe Jenius Bank will become a new pillar of growth in SMBC Group’s U.S. strategy.

For this project, people with different specialist knowledge have come together from all over the U.S. I am constantly thinking of how to incorporate their opinions within the mechanisms of SMBC Group. For example, when someone wants to do something new, it is easy enough to turn them down by simply saying, “You’ll never get it approved.” So, it is important that we find common ground within SMBC Group for new ways of doing things and make adjustments accordingly.

I’m in charge of compliance for this project. In general, compliance involves maintaining a conservative standpoint, which can lead to a gap between us and the business promotion side of a project. However, with this project, we launched it all together from the ground up, so compliance and the business side achieved a very good understanding of each other’s needs from an early stage, and I think we’ve been able to work in a balanced way with both sides feeling that they are part of the same team. I will continue to honor the importance of this going forward while working to defend in my compliance role.

One of our strengths is that the design team is in-house. With respect to the user experience, as with other aspects, we conduct panel-based surveys with the digital native generation and are carrying out development while continuously receiving their feedback. It is our view that most existing financial institutions do not adequately meet the needs of digital natives with respect to service recommendations. So, we are creating such services that anticipate life events, which means utilizing customer data to send messages such as, “You would benefit by switching your payment method to XX.”

The organization is primarily made up of employees newly hired in America. We have a number of offices, but most employees work remotely. In addition, this is the first digital bank for retail customers established by SMBC Group in the U.S., so the team has duties and working styles that are new for SMBC Group.

Our head office is in Los Angeles, but Jenius Bank has attracted people from all over America. We basically operate on a fully remote basis, so we have many exceptional people who have been interested in that aspect, and I think it is wonderful to be able to work in an environment with so much diversity.

Most of the team is used to working remotely because of the pandemic, but through offsite meetings we also create regular opportunities for team members to actually meet one another face to face. It is always fun to meet the people you’ve been working with and learn a little about their lives and interests outside of work. Because we don’t meet that often, it is all the more fun to find out things about each other.

To move a project forward smoothly even in a diverse environment in the U.S., it is of course important to listen to everyone with an accurate understanding of their intentions and also to clearly document and share what each person needs to do and when they need to do it by. We try to move work forward on a day-by-day basis in this way.

There are major differences in thinking between people who came from SMBC in Japan and people hired locally in America. People who are unaware of the culture of SMBC Group are full of questions such as, “Why is it necessary to get approval for this?” and “Why can’t I do this based on my own judgement?” Answering these questions with “Because those are the rules” is entirely unconvincing, so I try to patiently explain the background and basis of the rules and mindsets that I previously thought were more or less self-evident.

This project involves employees from Japan, the U.S., and other countries working together. If a project like this can succeed, I think it will create positive ripple effects for SMBC Group going forward. At the same time, areas requiring improvement will also no doubt become evident, so we will need to fully learn from those shortcomings as well. At first, I felt nothing but pressure, but I have gained experience including building a system overseas from the ground up and maintaining a risk awareness appropriate for a new business, so I hope to apply this experience to other new businesses as well and build even better things.

At Jenius Bank, development and project management are being conducted with methods that differ from the traditional methods used in the past. If we can succeed with these new methods, I think they can be applied horizontally to various other projects, and this would greatly benefit the system development of SMBC Group as a whole. I believe our most important stage is upcoming, so we will continue pursuing the project with these prospects in mind.

It is said that large corporations inherently face the innovator’s dilemma, but in promoting the Jenius Bank project I realized conversely that there are business opportunities that are available to us only because we are a member of SMBC Group. By combining the areas in which SMBC Group excels, I think we will be able to establish a business model that differs from both the major American banks and the fintech startups. One strength of being a latecomer is being able to launch with advanced technologies. Moreover, we will listen to user feedback more closely than anyone and utilize data in advanced ways to develop services that provide a high level of customer satisfaction. I’m very much looking forward to seeing Jenius Bank accepted by the market and begin to gain popularity for its services deeply rooted in the U.S. Moreover, while we are still in the launch phase, after the platform is established there is a Phase 2, a Phase 3, and more to the vision as well—the potential is great. There is still much to come before the full vision we have for the project is realized.