Silicon Valley Digital Innovation Lab Powerfully Promotes Digitalization, a Pillar of SMBC Group’s Strategy

SMBC Group has put forth the vision of “a trusted global solution provider committed to the growth of our customers and advancement of society” in our three-year medium-term management plan. We have now entered the final fiscal year of the plan. We are promoting digitalization that incorporates AI and other advanced technologies.

Looking at the Group as a whole, initiatives to realize digitalization were being advanced by each unit including the IT Innovation Department (the present Digital Strategy Department) and the IT Planning Department from before the Silicon Valley Digital Innovation Lab was established. The Silicon Valley Digital Innovation Lab was subsequently established in 2017 to grasp startups and advance solutions from a more global perspective and bring them to application.

As you all know, new things are created and new things are fostered here all the time. Until around two years ago, almost all the electric vehicles were Teslas, but now many electric vehicles other than Teslas are being driven. Everyone has the impression that this is a location where the metabolism is intense with new changes every day.

Silicon Valley is also a center for startups with state-of-the-art technologies and services, so it is a place where the chance of encountering high-quality information from among vast data is high. While speaking with various accelerators and venture capitalists, we can grasp superior solutions and the latest business trends. In that sense, I feel that the merits of being in Silicon Valley are great.

Our mission, after investigating the latest solutions and business models from various countries, not limited to just the US, is to make plans for commercialization in collaboration with startups together with the Digital Strategy Department in Tokyo, which our Lab belongs to, in addition to proof of concept (PoC) for the purpose of technology assessment.

While working together with the Digital Strategy Department and with each company and each department within SMBC Group, based on their respective needs and global trends, as a hub, the Silicon Valley Digital Innovation Lab advances the exploration of technologies that help our customers and the construction of new businesses.

I will share three initiatives with which we were actually involved. The first concerns solutions regarding data analysis technologies using AI. From July 2018, we introduced analysis software from dotData, which is a leading company in automated machine learning using AI, into SMBC Group and this is being used in making our data analysis works more sophisticated and more efficient.

dotData is software that uses AI to automate the data analysis process to accelerate problem solutions using accumulated big data inside the enterprise. In the past, it took several months to create a single model, but with dotData a model can be constructed in a few days. We are primarily using it for the marketing of various types of financial products, and with this, quick and highly accurate analysis results can be obtained in various works even if you are not an expert data scientist.

“Green × Digital,” which advances climate change countermeasures using digital, is a field that the Digital Strategy Department is focusing on since last fiscal year. We intend to contribute to supporting customers’ decarbonization from the digital aspects.

Persefoni is a software as a service (SaaS) startup company in the climate tech field. They provide CO2 emissions visualization solutions. We believe that grasping how much CO2 a company is emitting and how much energy it is using is the first step for advancing policies giving consideration to the environment. SMBC invested in the company in October last year, and we are presently examining specific measures toward deeper efforts in the future.

Through repeated discussions with each group company and department centered on the Digital Strategy Department in Tokyo, based on the specific needs and seeds that have emerged, we collect information on advanced technologies and business trends in the US and Europe and promote the application of digital technologies that we can ultimately adopt. First, we interview accelerators, venture capitalists, and other sources to collect information about startup companies which have solutions to our needs, make full use of various tools, and prepare a list of candidate startups. We then select the specific startups we will collaborate with through PoC and verification testing.

I think we can improve and expand business within SMBC Group by making clear what we want to do and what the issues are and leveraging the respective strengths so that this can become a win-win situation with each startup.

We are certainly not looking only at Silicon Valley startups. Because we are investigating appropriate solutions from needs-driven and trend-driven perspectives, we are collaborating not only with US accelerators but also with accelerators in Israel, and we also have a relationship with Plug and Play Japan. While collecting information on startups at diverse overseas locations, we are seeking solutions that match global needs and trends.

The strength of SMBC Group is that we have transactions with a great many customers inside Japan. On the other hand, in developing the Japanese market, although the startups we collaborate with want to deliver new convenient functions to corporations and individuals in Japan, they have limited opportunities to directly make proposals to customers.

I feel that the trust SMBC Group has as a financial institution and the environment in which startups can make proposals to customers through SMBC Group is attractive to them.

Yes, that’s right. With the revision of the Banking Act in Japan in November 2021, the range of services that banks can provide was expanded. For that reason, I think it is important to conceive and provide diverse solutions to society, not only limited to finance, with a focus on our customers. SMBC Group has positioned digitalization as an important pillar of our business strategy. For example, I think that through collaborating with other companies we can expand the range of use even for advanced technologies that are not yet widespread.

While we have advanced various initiatives and collaborations, we want to always seek solutions to expand and differentiate services that we are already providing as well. We want to advance diverse initiatives while always looking to the future.

There are no particular limitations to the fields in which we are engaged. What we have in common is that we always think about what services will help customers: all our members hold their antennas high and come into contact with high-quality information, and we advance projects in collaboration with group companies and departments. Based on this foundation, I think what we must do as SMBC Group is to think about what we can contribute to society and implement this in collaboration with startups worldwide.